Levelling-up and Regeneration Bill (Twenty First sitting)

Rachael Maskell Excerpts

Committee stage
Thursday 8th September 2022 Public Bill Committees

[Matthew Pennycook]

Clause 116(5) simply states that before making any EOR regulations that contain provision about what the specified environmental outcomes are to be, the Secretary of State must have regard to the current environmental improvement plan within the meaning of part 1 of the Environment Act 2021. At present, that environmental improvement plan is the 25-year environment plan, which was published in 2018 and is due to be reviewed next year. We welcome the fact that the Bill makes it clear that when making EOR regulations, the Secretary of State will have to have regard to that 25-year environment plan, although I encourage the Minister and his departmental colleagues and officials to do what they can to ensure that its review is completed before this Bill receives Royal Assent, so that the measures in the plan are fully aligned with the now operable Environment Act 2021, and so that the nature of the safeguard provided for in subsection (5) of this clause is clear and unambiguous.

However, while the explanatory notes to the Bill make it clear that the Secretary of State can draw on other relevant material when developing outcomes, there is nothing in the Bill to ensure that the Secretary of State must have regard to other important obligations and requirements set out in environmental and climate legislation beyond the environmental improvement plan.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful for the work that my hon. Friend is doing on the environment, and to try to ensure that the climate is front and centre in the Bill. Commitments were made at COP26 and COP15. We need the application of those commitments to come through in planning; there is nowhere else that they can come through. Is it not important that the determinations reached at those summits be brought into the planning process?

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[Paul Scully]

Clause 118 gives the Government a constrained power to set what plans and consents require an environmental outcomes report. The Government want to be clear about which consents and plans require assessment, and we will use subsequent regulations—bounded by the commitment to non-regression—to provide clarity on when an EOR is required. By clearly setting out the different categories for consent and the types of plan that require assessment, we will be able to address the key issue with the current system, where debate about whether assessment is required acts as a block to moving forward with meaningful assessment.

We want to avoid unnecessary screening work, so it is more likely that more plans and projects will automatically be subject to a proportionate report and only in borderline cases must a criteria approach be followed. Developers will know where they stand up front, and local planning authorities can save the time and resources that are usually taken on screening of opinions.

Let me reassure the Committee that the clause will be used to reduce uncertainty, not assessment. The Government remain committed to ensuring that all plans and projects assessed in the current system will continue to be assessed, while removing troublesome uncertainty. The Government will also consult on which projects and plans should be subject to EORs. Parliament will have the opportunity to debate and approve the regulations that set that out. I commend the clause to the Committee.

Moving on to clause 119, the Government have made it clear that the protection and enhancement of the natural environment is a policy priority, and the measures designed to achieve that should be consistent and long term. The existing system does little to follow through on the commitments made during the assessment process—for example, whether the mitigation measures actually work or are implemented in the first place. Environmental statements are often created at great length, only for the follow-up monitoring and reporting of the impacts on the ground to be inconsistent at best.

Our proposed reforms to environmental assessment therefore provide a renewed and stronger emphasis on monitoring, to ensure that stated outcomes are delivered and that remedial action is taken where required throughout all stages of the development process. That means that achieving environmental outcomes does not stop once a consent is granted or a plan adopted. Importantly, clause 119 enables the Secretary of State to make regulations requiring action to be taken when monitoring or assessment processes have highlighted that a given outcome is not being delivered.

Those actions align with the mitigation hierarchy and the principles of avoidance, mitigation and compensation being built into that process to ensure accountability and to address fully any unanticipated or cumulative adverse effects on the environment.

[Rachael Maskell]

I have been listening carefully to the Minister. My concern about what he has been saying is that the process does not have sufficient teeth in the event that the EOR is not delivered. Can he clarify whether planning permission would be granted if the EOR requirement is not adhered to? Should that not be a condition for planning?

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[Paul Scully]

In some rare cases, particularly those relating to national defence or responding to a civil emergency, it may be necessary for the Secretary of State to direct a project to progress without an environmental outcomes report when the production of one would usually be required. The provisions in clause 122 enable that. The clause does not aim to bypass environmental protections, which are important for all the reasons I have set out; it simply accounts for those rare instances in which there is an urgent need to progress with development. Clause 122 replicates a similar provision in the existing regulations, and would only be used in the most extreme circumstances.

In addition to the civil and defence needs, the clause also provides powers via regulations for the Secretary of State to be able to direct that no environmental outcomes report is required in other circumstances. Such directions will, of course, be presented in regulations subject to the affirmative procedure, and will be consulted on and constrained accordingly.

[Rachael Maskell]

I appreciate the Minister highlighting that there could be extenuating circumstances in which the measures could be suspended, but he has not set out what mitigations will be put in to address that, either in close proximity to that or elsewhere. Could he say a bit more about that?

[Paul Scully]

Good question! As well as the non-regression clause that I talked about earlier, we have a built-in power under these clauses that allows aspects of the regulation to apply even if a project can initially progress without an EOR. That is a good way to manage those high-risk needs with environmental protection and get that balance right. It allows a project to progress without a report, but still requires certain aspects of the regulations to be adhered to, such as monitoring and remediating effects once the plan or project is in operation. I again highlight the fact that that would only relate to the plans and projects in greatest need, relating to matters of national importance.

Levelling-up and Regeneration Bill (Twentieth sitting)

Rachael Maskell Excerpts

Committee stage
Thursday 8th September 2022 Public Bill Committees

[Matthew Pennycook]

It is a pleasure to reconvene with you in the Chair, Mrs Murray. I warmly welcome the hon. Member for Sutton and Cheam to the caretaker role that he has bravely taken on today. He is the third Minister I have engaged with in proceedings on the Bill. The shadow Department for Levelling Up, Housing and Communities team are setting new records when it comes to the ministerial attrition rate. It may be overly ambitious to hope that we can get through five Ministers by the completion of proceedings on the Bill, but we live in hope.

On a serious note, I place on record our thanks to the hon. Member for Nuneaton (Mr Jones) for his efforts in taking the Bill through Committee in recent weeks, including before the summer recess, and for the constructive way in which he did so. I hope that we can continue in that vein today.

We had, in our last sitting, an extensive debate on the infrastructure levy, and touched on the issue of viability as part of the design of any new proposal. This group of amendments relates to the infrastructure levy rate-setting process, and how viability testing will be used to inform it. Once again, allowing for the fact that we do not have the detail we need, and for the fact that the required forthcoming regulations will be subject to further consultation, I am assuming for the purposes of these amendments—largely because of the remarkable similarity between schedule 11 and the provisions in the Planning Act 2008 that gave effect to the community infrastructure levy—that the Government are minded to base the IL rate-setting process on that which applies to the process for adopting a CIL charging schedule.

If that is the case, the process will require charging authorities to undertake—if not directly, then by commissioning consultants for the purpose—an area-wide viability assessment. Such assessments would be similar to—and indeed could, where appropriate, be combined with—the area-wide viability testing that forms part of the evidence base for the examination of new local plans. As “full viability assessments”, these will involve a large number of residual land valuations for different development typologies, and potentially strategic sites, to test what IL rates could be supported in different circumstances. It is likely that they would have to consider all aspects of development appraisal, including average values, costs, profit and land value, rather than using gross development value as the value-based metric used to determine specific IL liabilities.

The new levy has broader scope than the CIL, incorporating as it does both infrastructure and affordable housing. Higher rates will be necessary as a result. Given that, and given that GDV—the metric to be used—does not take into account site-specific development costs, IL has the potential to result in significant non-negotiable liabilities, so the stakes involved in the IL rate-setting will be far higher than those that pertain in the CIL charging schedule adoption process. Thus it is almost certain that the IL rate-setting process in any given area will be heavily contested; landowners and developers will task their representatives with challenging the scope of the assessment, its methodology, inputs, assumptions and conclusions, with a view to reducing IL rates and their future liability. There is therefore a strong case for putting in place additional measures to ensure that the IL rate-setting examination process is fair, and I hope that the Government are exploring what might be done to ensure that the Planning Inspectorate is able to draw on the necessary expertise so that that is the case.

The aim of amendment 162 is to ensure that the bar for viability testing in the IL rate-setting and examination process is not set unreasonably high, and that there is therefore a more level playing field between charging authorities and those who might potentially object to a proposed IL rate or rates. The amendment seeks to avoid authorities being compelled to either undertake onerously detailed analysis, bring forward overly complex charging structures or set artificially low rates to compensate for the risk that the Bill creates of developers arguing that specific projects in an area are unviable. It does that by specifying, using the language used in proposed new section 204A(2) of the 2008 Act, that when setting IL rates, charging authorities must consider the economic viability of development in the area as a whole. That would make it clear that in the rate-setting process, the test of viability should not be so specific as to relate to individual sites, unless perhaps they are of strategic significance to the charging authority area, but should instead take into account viability across a range of sites, and the overall delivery of the amount of development envisaged in the local plan. That is in line with current practice, and would mean that IL rates would not be unduly influenced by the characteristics of development sites that may not be typical of the area, and that could result in nil or particularly low rates being set across the whole of it.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to my hon. Friend for tabling the amendments. It is clear that the system is not working, because when going through the planning process many developers argue that the site is no longer viable, and therefore make changes to the plans. What should be put in place to ensure that we have more accurate viability testing before planning permission is granted?

[Matthew Pennycook]

I thank my hon. Friend for that well-made point. We had, as she will know, an extensive discussion on viability in the last sitting. The system is flawed in many respects, but there are ways in which it has been improved in recent years, and it could be improved further. The Mayor’s threshold approach in London is a good example of how that can be done; it draws in relevant expertise to ensure that contentious sites undergo a full viability assessment.

Our issue with the proposed system is that it is premised on removing the viability issue from the process entirely, but the point here is that the system certainly does not do that; at the rate-setting stage, viability is very much an issue. That needs to be addressed through the amendments. Amendment 162 would ensure that IL rate-setting testing and examination cannot be unfairly manipulated by developers seeking to drive down levy rates, because the amendment would clarify that charging authorities will not be expected to test every development site in their area. It would mitigate the risk that the infrastructure necessary to support development will not come forward, and that amounts of affordable housing will be reduced.

Amendments 163 and 164 are necessary to give full effect to the Government’s commitment that the new system will be, to quote the policy paper, a “locally determined Infrastructure Levy”, with Il rates set locally by charging authorities. The amendments do that by altering the provisions that give the Secretary of State the power to impose specific IL rates, nil rates or minimum thresholds that have not emerged as a result of an examination, or been justified with reference to local evidence. By preventing the Secretary of State from overriding a charging authority in those respects, the two amendments seek to avoid a scenario in which a charging authority is either prevented from developing its own IL rates or, after the lengthy and resource-intensive process of determining the IL rates and thresholds appropriate for its area, and after having them verified by an independent examiner, has them overridden by the Secretary of State.

There is nothing in the Bill to ensure that IL rates imposed by the Secretary of State in the way that the Bill allows would be based on local evidence or subject to independent assessment. There is therefore an obvious risk that the Secretary of State may, on occasion, be persuaded to bypass the IL rate-setting process on spurious grounds. We feel strongly that the process should be genuinely local, and that charging authorities should be confident, if they develop a rate or rates that are approved in examination, that they will be able to apply those without interference from the Department. I look forward to hearing the Minister’s thoughts on each of these important amendments.

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[Rachael Maskell]

I beg to move amendment 168, in schedule 11, page 288, line 25, at end insert—

“(4A) IL regulations must make provision for a sliding scale of charges increasing in proportion to the share of the development that is on greenfield land, for the purposes of incentivising brownfield development, unless any development on greenfield land is offset by the re-greening of an agreed area of brownfield land in a densely developed or populated area.”

This amendment is offered as an alternative proposition to Amendment 59, adding safeguards intended to prevent extremely dense development in urban centres with an undersupply of open space.

[The Chair]

With this it will be convenient to discuss amendment 59, in schedule 11, page 288, line 25, at end insert—

“(4A) IL regulations must make provision for a sliding scale of charges increasing in proportion to the share of the development that is on greenfield land, for the purposes of incentivising brownfield development.”

This amendment would require rates of the Infrastructure Levy to be varied in line with the proportion of the development that is on greenfield land in order to promote brownfield development.

[Rachael Maskell]

It is good to see you in the Chair again, Mrs Murray. I welcome the Minister to his place.

Amendments 168 and 59 have the same objective. Labour has set out clearly that we believe it is important that brownfield sites be developed on first. Many sites across the country have been wasteland for too long. We have a housing crisis and there are economic opportunities, so we very much want to see developments. Such sites are often old industrial areas, which are begging for housing development.

York has the largest brownfield site in the country, adjacent to the station, so we have obviously given much thought to this issue. I am glad that the Government supported our call to make it a site of development. What will go on there is another matter of dispute, but it is welcome that, the site having been derelict for 30 years, we now see roadworks on it—I was looking at them just last weekend—thanks to the additional funding to release it that has been locked in by the railways, but my amendments seek to go further than that.

The White Paper—it is important that we refer to it—suggested that development could be brought forward almost on street corners if sufficient land was available in developed areas. Of course, that takes away vital green space from local communities. My amendments therefore seek to recognise the value of green space in urban environments. It is crucial that we join up the agendas across Government—I often think the Government think too much in their own silo—when looking at the opportunities to create green spaces in urban areas. They could address environmental issues, including drainage and flooding, and mental health issues.

In my constituency, brownfield sites’ being turned over for development has led to a very heated-up urban centre, which has serious consequences. The York Central site and other developments on the west side of the city are taking up spaces that were either old industrial land or school playing fields, which means that we have more traffic. As a result, the west side of York will become gridlocked because the development has not been properly thought through. Within the planning process, the developers are referring back to our local transport plan from 2011, which is well out of date.

If we keep developing on brownfield sites without thinking about the wider consequences, it will have a significant impact on the urban environment and will ultimately create more congestion and pollution, which will have a significant impact on the local community, whose frustrations will grow. We have to make sure that we talk about infrastructure and the transition from car use to public transport or active travel, and we need to take a more holistic view rather than focus on brownfield site development, but my amendment seeks to go further than that in recognising the importance of having some of that land converted into green spaces.

I can give a fantastic example in Tang Hall, a densely populated area of York. It used to be the old refuse site and would have been classified as rich for development, but it was turned into St Nicks environment centre and an incredibly important space for wellbeing. The centre runs opportunities for people experiencing mental health challenges and engages in environmental projects, thereby improving the wellbeing of all residents in the local area. That was a project of yesteryear, but as the housing crisis, which is significant, has grown in York, I have noticed that areas where there is the greatest deprivation—somewhere such as Clifton, where life expectancy is 10 years less than elsewhere in York—also have the least green space.

The former Bootham Park Hospital was on public land, and people would go there and walk around. That space will be handed over to a private company with the disposal of the hospital, but Bootham School will take over the land for its playing fields, which will lock out the public. However, the rest of the estate, where there is currently green space, will be turned into further housing. That involves changing somewhere that is green but categorised as a brownfield site into a developed area, which means that the area will lose public green space. People will not be able to walk their dogs, get fresh air and improve their mental health. We know the correlation between mental health and deprivation, so that is really important.

I can give another example. Acomb had a secondary school in what was the old Acomb Park area, and the school had playing fields. Although the school has been disposed of, the area has been used by the public as a free park for the community, which has been really important. However, the land would be categorised as a brownfield site, and our local council has the intention to develop the site and put more housing there. We desperately need housing—I am not decrying that—but we should re-categorise some brownfield space as green space and then use some current green space as brown space, thereby getting the green lungs into the city. We know from research that that was very much the focus over 100 years ago, because that was how York was built out.

Putting in green lungs will increase the opportunities to improve mental and physical health, to have a better environment and to address some of the issues around pollution and so on. It will also improve the whole area by creating public space and a sense of community. If we see a direct swap with current greenfield sites, I do not believe that the area should be penalised for not building on brownfield sites but choosing to build on greenfield sites. This is about providing greater opportunity and recognising that we can develop brownfield sites first but put in those green lungs in order to place the proposed housing in other areas. We should not penalise local authorities for improving public health and wider aspects of their community. That is a perspective that a joined-up Government would be looking at: how we improve not just homes and units, but communities and people, which is what planning should be all about. My amendment seeks to provide that opportunity, recognising the reality of this in highly populated areas in particular.

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[Rachael Maskell]

I thank the Minister for his authoritative words in recognising the importance of green lungs in urban environments, because they are so important. Often in planning we lose the wider benefits we are trying to achieve when we look just at bricks and mortar as opposed to people and places. It is so important that we bring that to the fore in this debate, so I will certainly refer back to his speech when talking about this issue. It is important to draw that out as we consider how we take planning forward.

Of course, I am disappointed that the Minister does not want to advance my amendment, but I will withdraw it at this stage and see on Report whether the Government will recognise the opportunity to stress the importance of green in brown areas. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 169, in schedule 11, page 294, leave out lines 15 to 28 and insert

“(a) roads and other transport facilities, including routes for good quality active travel including cycling, walking and micro-mobility, parking facilities and street infrastructure including benches,

(b) flood defences,

(c) schools and other educational facilities including nurseries, play areas and family friendly areas,

(d) medical facilities including dentists, diagnostic hubs, general practices and other community spaces to address mental health and promote wellbeing,

(e) sporting and recreational facilities including youth centres and skate parks,

(f) open spaces,

(g) affordable houses,

(h) facilities and equipment for emergency and rescue services,

(i) facilities and spaces which—

(i) preserve or improve the natural environment, or

(ii) enable or facilitate enjoyment of the natural environment,

(iii) provide outdoor space for communities including allotments and forest schools,

(iv) provide flood and drought mitigation,

(j) space for energy generation

(k) space for business incubation

(l) community buildings for social, cultural, religious purposes,

(m) community facilities including post offices, cafes, libraries, support and advice centres

(n) day centres for the elderly or disabled people, including for the purposes of state-provided day or residential care.”

This amendment broadens the scope of inserted section 204N(5), which defines “infrastructure” for the purposes of the Infrastructure Levy.

I appreciate being able to talk about this amendment, not least because although the schedule—I do not mean any offence—is a list of areas the infrastructure levy could be focused on, it is not a comprehensive list. Therefore, I wanted to expand on areas I think are important for the Government to consider in the planning process at this stage.

We are going through perhaps the greatest change to our economy in our lifetimes, whether that was caused by Brexit, covid or, now, the energy crisis, and none of us knows what is around the corner. As we look at planning, we need to think in a more holistic way. Many of these crises are forcing us into that space, and in many ways we have had to do that thinking, which could be positive. Therefore, in looking at the opportunities available to us, I would argue that the definitions in the schedule are too narrow and that the list should be more expansive.

It could be argued that my amendment puts down an even more expansive list but still is not comprehensive, and I will come back to that in a moment because I recognise that a number of other areas could be included. I am sure the Minister will argue that many of the things that I have listed in my amendment could easily fit into some of the points already in schedule 11. However, my amendment provides an emphasis. For instance, proposed new section 204N(3)(a) in schedule 11, which covers

“roads and other transport facilities”,

sets out a car-focused future. Of course, our future should not be dependent on roads and cars. We have active travel, so we should be talking much more about cycleways and footpaths, and opportunities for micro-mobility, which we are seeing the advent of. Proposed new paragraph (a) emphasises development around a hydrocarbon future, as opposed to moving away from that.

I could talk a lot about many of the other areas. We will concur around such issues as flood defences—York is unfortunately at the top of the league for flooding—but I want to come on to such things as schools and other educational facilities. For instance, what about nurseries and play areas? We know that investment in early years is really needed. That goes beyond an educational facility; we need play areas for children. I would argue that play is education, but would that fit within the definition when we came to argue such points within our local planning systems? We need to ensure that there are family-friendly areas and areas where people can feel safe and included. Looking at expanding the definition under proposed new section 204N(3)(c) is very important.

On medical facilities, the world of medicine is changing. Diagnostic hubs are coming forward from the Government, which I very much welcome. We are seeking to get them in my constituency, and we need to think about health in a very different way than we have in the past. Medical facilities will not necessarily just be clinics or hospitals, as we have seen in the past. We are moving much more into social prescribing, particularly on mental health. When it comes to mental health and wellbeing facilities, we need to look at the most advanced place pioneering mental health work, the city of Trieste in Italy, which does not have hospitals for mental health, because people have facilities in the community. Would that be included here, or would it be seen as something very different? Again, I would argue that the brief definition in the Bill is quite outmoded within its own context.

Proposed new section 204N(3)(e) covers “sporting and recreational facilities”, but what about youth centres and youth clubs? The Government brought forward a proposal to develop 300 new youth facilities, and of course we welcome them into our communities. Sadly, in York we are losing ours, but if we introduce more youth clubs and facilities where do they fit into the proposals? We know that we absolutely need them.

My amendment goes further in looking at some of the areas that we particularly need to focus on. My proposed new section 204N(3)(i) focuses on the need particularly for allotments. We have not heard much about allotments in the debate on planning, but I have been talking to the York Allotments Charitable Incorporated Organisation, which oversees our allotments. YACIO has been talking about the impact that allotments have on mental and physical health. We need to go back over 100 years, and look at New Earswick for the model regarding allotments. Many will know that New Earswick is the first garden village in the country. It is not in my constituency; it is in that of my neighbour, the hon. Member for York Outer (Julian Sturdy). It was designed for urban clearance—for moving people out of the slums and tenant homes in York into a new village—but every home was allocated an allotment. This was family housing, where people had some garden space, but also an allotment.

If we think of today and the food crisis, and the mental health challenges that we all face in our constituencies, having allotments available for families is incredible for the community and for wellbeing. In York 1,500 people are currently waiting for allotments. There is a real shortage. Being able to develop allotments through the amendment would be really good for the wellbeing of our communities and for the people waiting for them. I said that 1,500 people are waiting, but we have 1,350 allotment spaces, so some people are being told that it could be 10 years before they get an allotment. Bringing plots forward could, again, join up Government, tick lots of boxes, and make things available for our wider communities. I think that is really important. s

What the Rowntrees achieved there with their pioneering social work could have a significant impact if we think about the need. In urban spaces in particular, more and more flats and apartments are being built, but people do not have any green spaces, so where do they have the opportunity to grow their own veg? Community gardens and community allotments where there is a collective share are really important in giving people the opportunity to grow their own food. At a time when there is a food crisis, this is a step for many families in food poverty towards greater resilience. These crises are focusing our attention, and we have to think about these things in our modern age.

Turning to my proposed new section 204N(3)(j), the Government are missing a massive trick—I want to stress that this is so important. I was just listening to a BBC World Service programme, which a constituent drew to my attention, about what other countries are doing in relation to energy. It was a fascinating listen; I do not know whether the Minister heard it. Particularly in the Netherlands, but also in Scandinavia, they are making facilities for local energy production on the outskirts of areas. We are currently in an energy crisis, and we all obviously want the very best for our constituents. I notice that the energy debate has started in the main Chamber; I am sure we are all longing to see what the exact proposals are, but in Scandinavia, they allocate land to be used for energy development and production. That is renewable energy production for a local community, so there is a dependence on local energy, which of course can be built into wider networks.

It is really important that the Bill puts into the planning system those allocated opportunities for the IL to be used for future energy production. If we do not have that in the Bill, those spaces will disappear, and we will miss that opportunity. If we are looking at the opportunity presented by wind, solar and in other areas, this could be part of the solution, not only in relation to local energy prices and the costs that people are having to pay now, but also job opportunities on those sites and for future energy supplies. The fact is that other countries are ahead of us. We often focus on what is happening here in the UK, trying to get those plasters out and stretch them as far as we can, but if we look to Finland, we can see that they are instituting microgeneration and large generation of energy for their local communities. That creates a direct relationship, but it is also fantastic for the climate.

We should be thinking about future opportunities. I think it is remiss of the Government to not include those opportunities in this Bill, so I want the Minister to give this issue some thought as the Bill goes through Parliament. Obviously, it would be great to have support for that today, but if at a later stage of the Bill we can ensure that there is space for energy generation, that would be a real advance and would represent a commitment to the people that energy challenges will be addressed.

I also want to draw attention to my proposed new section 204N(3)(k), which deals with business incubation. We know where there are opportunities for investing in business growth. Often, we think about growing out housing, but we also need to build a high-skill economy with good wages for the future. We want to give our entrepreneurs opportunities; they need incubators and accelerators to grow their businesses, root them and ensure they are successful. We know the great success that comes from businesses, but they need those start-up opportunities. Again, I have been hearing about amazing projects that are building that infrastructure, but it has been because somebody has given them a peppercorn rent or they have had generosity from elsewhere. If we are building new conurbations in particular, we need to think about rooting opportunities in those areas for new businesses and ensuring they get the support that they need to grow, but getting that first building—that first step—can be incredibly challenging. I would certainly want to see that in the legislation.

That takes me to my final proposed new paragraph, although it also draws into some of the other areas. When seeing new developments, we often see a lack of opportunity to celebrate the diversity of our communities. I have been greatly concerned about that in York. Many moons ago, there was a proposal for a cultural centre that was kiboshed for whatever reason and never went forward. We do not have a cultural centre in York. We are increasingly seeing a diverse community and that is fantastic, but not places where people can congregate and socialise. We are seeing greater isolation in our communities, particularly among old people. Nine million people are lonely in our country and they do not have somewhere safe to go and meet other people. Therefore, it is important to be able to build community centres, as well as new churches, mosques and places of worship.

If we think about the old villages and towns, there was no place in the country without a church in every community—a place where the community could gather and members could have their spiritual, social and so many other needs met. Those pillars in our community were the pub and the church. I appreciate that some of those pubs have been facing many challenges, but the church still stands—those buildings still stand.

We need to see those opportunities coming forward for new developments so the community’s needs are met. Those things need investment. The infrastructure levy can be used to support vital community infrastructure. That is drawn out through proposed new paragraph (m), which looks at local facilities, and they can be pooled. It is possible to have a church that is a post office. I do not know whether it could be a pub as well, but it certainly could be a café. We are seeing a lot of those facilities coming together.

Where is the heart of community if we just build? We have all been to those horrific estates where there is no community centre and where there is just housing, housing, housing or flats, flats, flats, but the community is not pulled together. I have seen that in developments in York and it is horrid. People are not centred; they do not know their neighbours, they do not know anybody around them and they are increasingly isolated. As I said, 9 million people in our country experience loneliness. If we think about that wider context of where that goes because of the type of housing—increasingly flats and apartments—being built, if we do not invest in that social infrastructure as well, we are going to end up with a massive mental health and isolation challenge in the future.

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[Paul Scully]

It has been interesting moving around some of the areas where the infrastructure levy can be used, whether for cycles, footpaths or micro-transport. The hon. Member for Greenwich and Woolwich mentioned from a sedentary position that we are going to get the good experience of York. I did not realise that we were going to have the experience of Trieste in Italy as well. It is interesting to hear about that, although I understand that in Trieste they do not have mental health provision in hospitals either because they tend to keep to people suffering with their mental health in their homes. It is a different cultural situation, but the point was taken.

The hon. Member for York Central talked about allotments. I do not want to see the community levy contributing to a dulling of good developers who want to provide community facilities as part of their place-shaping. Allotments are comparatively low cost to design and implement, but have massive social and community value. I very much understand that point. Having been the Hospitality Minister for two years, and now the Minister for Faith, I find the hon. Lady’s proposal to combine those roles in the church/pub really interesting—we will see how that goes.

This is the problem with putting lists in Bills. The list is not supposed to be exhaustive and comprehensive—there are plenty of things that charging authorities can, should and will be looking at, such as those the hon. Lady has outlined. The Bill gives a starting point, but I do not think we need to go further at this stage, because the rest of the Bill gives the local authorities wide powers, allowing them to spend the levy on the infrastructure that their communities need, rather than it being imposed by us in the detail proposed by the amendment.

I reassure the hon. Lady that, should a local authority wish to spend the levy on items of infrastructure that are not expressly stated in the list in proposed new section 204N, as long as it is infrastructure in the common sense and natural meaning of the word, it will indeed be able to do that. The levy can be spent on any infrastructure that supports the development of an area, including funding the provision, improvement and replacement, operation or maintenance of infrastructure, providing that it is in accordance with the original aim of the levy as set out in proposed new section 204A.

The Bill also allows for regulations to add, remove or vary the content of the list to support infrastructure delivery through the levy if it is necessary and if any clarification is needed.

[Rachael Maskell]

Energy should get particular mention in a redrafting of the Bill. Other countries are further advanced; we are behind. That is a specific point, and we should see that change. Does the Minister conclude that all the other issues in the amendment would be facilitated by proposed new section 204A, as set out in that broader definition of the Bill? If that is the case, I am happy to withdraw the amendment.

[Paul Scully]

I do not see the need to put energy generation in the list because, absolutely, that and the other areas she raises are included. I am happy to give her that reassurance. As long as the local authority thinks something is needed, and it fits within the definition of infrastructure—I think we can agree that all the points she raises fit within that definition of infrastructure—the answer is yes.

[Rachael Maskell]

I am grateful to the Minister for giving way again. Just for clarity: if the authority were to bring forward a proposal for microgeneration of energy or an energy facility in order to support a local town, conurbation or whatever, that would be included, too. I made the point about energy having a separate mention in the Bill because it is such a big issue and much broader than some other areas, but would that also be covered?

[Paul Scully]

Yes. If the local authority thinks it is needed, then absolutely. The discourse around housing is often just about the supply of housing, but clearly energy, and energy generation of all sorts, needs to be brought into it. We need to bring in schools, hospitals and medical facilities of all types, and indeed allotments, as she said. Yes, I can give her that assurance, and ask her to withdraw the amendment.

[Rachael Maskell]

I have heard what the Minister has said. I will take his words as authoritative—they will be in the Hansard record of today’s debate—and, as a result, I will withdraw my amendment. The point about energy is significant, not least if I look at the Derwenthorpe development by the Joseph Rowntree Housing Trust in York, which has put energy and a community centre at the heart of that social/private development. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 165, in schedule 11, page 306, leave out from line 38 to line 2 on page 307.

This amendment would limit the circumstances under which the Secretary of State could direct a charging authority to review its charging schedule.

This amendment, much like amendments 162, 163 and 164, which we debated earlier in relation to the IL rate-setting process, is concerned with ensuring that the new levy system is genuinely local and that charging authorities are fully in control of developing its discretionary elements at a local level. It would remove proposed new section 204Y(1)(b), which provides the Secretary of State with the power to direct a charging authority to alter its charging schedule in a range of circumstances, including

“in any other circumstances that IL regulations may specify”.

That is of particular concern.

Given that the Bill gives the Secretary of State the power to revise individual charging schedules at their sole discretion, with no need to justify that intervention by means of any objective evidence-based criteria, we are concerned that, as drafted, it could have significant implications. For example, it could allow a future Secretary of State to require a charging authority to amend its locally developed charging schedule as a result of lobbying by a developer, without having to provide any evidence that the levy as implemented in the area in question is impairing viability and frustrating development.

We believe that this amendment is necessary to ensure that the Secretary of State cannot direct a charging authority to alter its charging schedule merely due to the passage of time or any other circumstances they see fit, given that the only justified rationale for an intervention from Ministers in relation to a charging schedule—namely, its impact on viability—is already covered by subsection (1). I look forward to the Minister’s response.

Levelling-up and Regeneration Bill (Nineteenth sitting)

Rachael Maskell Excerpts

Tuesday 6th September 2022 Public Bill Committees

[Rachael Maskell (York Central) (Lab/Co-op)]

Could the Minister give some examples of what those extensive directions could include, because that is not made clear in the Bill?

[Mr Jones]

If the hon. Member bears with me for a moment, I will give her an example.

The measure will enable regulations to set out the circumstances where charging authorities could spend a specified amount of the levy on items that are not infrastructure. This means that in some areas, once local authorities are able to meet their affordable housing and infrastructure needs, they could have scope to increase their flexibility on what they spend levy receipts on, such as improving local services. This would remain a matter for the local authority to decide on, subject to any limitations set out in regulation or guidance, ensuring that infrastructure and affordable housing remain priorities. Furthermore, it is right that even if such extended funding of the levy is permitted and taken up by the local authority, it should be subject to the overall test in proposed new section 204A that such costs must not make the development an area economically unviable. Therefore, we do not believe the amendment is necessary, so I ask the hon. Member for Greenwich and Woolwich to withdraw it.

--- Later in debate ---

[Matthew Pennycook]

As the Minister made clear this morning, the Government are not willing to give charging authorities discretion when it comes to adopting the infrastructure levy, or any freedom to determine the best metric upon which to calculate IL rates. However, I want to try to persuade him to reconsider using the levy to deliver affordable housing.

Amendment 150 would insert into proposed new section 204A a proposed new subsection making clear that the intention of IL is to enable charging authorities to raise money to fund infrastructure to support the development of their areas, while allowing planning obligations under section 106 of the Town and Country Planning Act 1990 to continue to be used to provide affordable housing and to ensure that development is acceptable in planning terms.

Amendments 151 and 152 would make consequential changes to the schedule, respectively removing affordable housing from the list of what is designated as infrastructure and preventing regulations from reinserting it into that list at a later date.

When I spoke to amendments 142 and 143 and amendments 145 to 147, I set out our two main concerns about the new levy—namely, that it is likely to prove onerously complicated to operate in practice and that it will almost certainly lead to less infrastructure and less affordable housing overall than those secured under the present system. It is the second of these concerns that lies behind amendments 150, 151 and 152.

Under the present system, funds raised through the community infrastructure levy are used only to fund infrastructure, facilities and services that support development in a given area. It is individual section 106 agreements that, along with any grant funding secured, pay for affordable housing. Under the new system, which is premised on affordable housing as well as all other required infrastructure being funded through a single mechanism, local planning authorities will be forced to set IL at significantly higher rates than the community infrastructure levy, which is typically equivalent to a relatively small proportion of development value.

The obvious resulting risk of having to set such high rates is that development on less viable sites, the majority of which are concentrated in those parts of the country most in need of levelling up and which the Government say is their mission to help, will simply not happen. As such, local planning authorities in areas with higher risk to viability of brownfield sites will be left with a choice: either allow such sites to remain undeveloped, or lower IL rates sufficiently to incentivise development on them but forgo essential infrastructure and affordable housing from more viable sites as a result. In practice, both outcomes are likely to materialise. If that is the case, it will have significant implications for the supply of infrastructure and high-quality affordable housing across the country.

There are very good reasons for the Government to reconsider funding affordable housing through the new levy, and I want to briefly speak to a number of them. First, there has never been a previous attempt to implement a single fixed-rate levy mechanism for securing both infrastructure and affordable housing. That is not for want of some extremely clever people attempting to design such mechanisms, but the desire to incorporate affordable housing into previous systems, including CIL, was ultimately abandoned, because each time they were deemed to be inoperable in practice. That is an obvious warning that the Government would do well to heed.

Secondly, as we have already discussed in the debate on the first group of amendments to part 4, by systematically financialising the provision of affordable housing, and for that matter on-site infrastructure, with the inherent variability and uncertainty that that entails, the levy is likely to unnecessarily complicate the planning process, resulting in additional delays, disputes and resourcing pressures.

Thirdly, the rigidity inherent in applying one or more IL rates in any given charging area to sites within it that will inevitably vary in terms of development and land values will result in a wide range of levels of affordable housing and infrastructure contributions across sites. That is inherent to the design of the levy. As a result, it will be incredibly difficult for local planning authorities to know what levy rates to set in order to fund all necessary infrastructure and meet the affordable housing need identified in their local development plans.

Fourthly, there are inherent problems when it comes to attempting to provide affordable housing through a rigid fixed-charge approach, because of how such a charge interacts with viability. If the Government are adamant about pursuing a fixed-charge approach, they could always consider a fixed-percentage affordable housing requirement delivered through section 106 agreements, which would be preferable to a general levy calculated on the basis of gross development value.

By amending the national planning policy framework as they have done, to place greater emphasis on viability testing as a part of plan-making rather than as a feature of individual site applications, the Government have already firmed up affordable housing requirements while still allowing for flexibility in exceptional cases where there are genuine viability challenges. In our view, the current arrangement strikes the right balance and, as I said this morning, the Government’s time would be better spent focusing on what more could be done—for example, by equipping local authorities with the specialist skills and resources that they need to make the existing system work more effectively.

Lastly, and related to the previous point, setting a fixed IL rate or rates will inevitably result in the loss of affordable housing supply on every site in a given charging area that could viably deliver more than the rate in question would require, while at the same time putting at risk entirely the development of sites grappling with genuine viability challenges that would be unable to provide the requisite level of contributions. That problem is inherent to the nature of a levy premised on a general fixed rate or rates within charging areas where there is variation in values and costs between sites.

Whichever side of the line individual charging authorities ultimately come down on, the overall result will be lower rates of affordable housing delivery in England. If local planning authorities try to overcome that inherent flaw in the proposed levy system by setting myriad different IL rates, in an attempt to respond to the natural variation in development and land values in any given area, the result will be a smorgasbord of rates, which would make for a fantastically complicated arrangement that would make it hard, if not impossible, for developers and communities to understand the extent and nature of the contributions due on different sites in a given locality.

It is telling that despite the Government’s commitment to the levy securing at least as much affordable housing as developer contributions do now, there is nothing in the Bill that guarantees that that will be the case. We need to be confident that we are approving a framework that has a reasonable chance of at least maintaining the supply of affordable housing that we currently secure through developer contributions, and ideally one that allows for improvements to allow that supply to increase, because it needs to increase markedly.

Short of giving charging authorities discretion in relation to adopting the infrastructure levy and the freedom to determine the best metric on which to calculate IL rates, limiting the scope of the levy to the delivery of actual infrastructure and retaining the use of section 106 to fund affordable housing, as amendments 150 to 152 propose, is the best means of achieving that aim, because it would overcome the problems with the setting of IL rates that I have described and the impact that fixed rates will have on overall levels of affordable housing secured through developer contributions. It would also directly address an issue we have not discussed—namely that a fixed levy would not be capable of determining affordable housing requirements for estate regeneration schemes, which necessarily vary from site to site, depending on the existing level of affordable housing that should be re-provided and how much additional affordable housing can be delivered.

I trust that the Minister has carefully considered the arguments I have made and will consider accepting the amendments, which would make the Government’s levy proposals far more workable than they currently are. Either way, he really does owe the Committee an explanation of how the levy will operate in such a way as to ensure that developments are viable and deliver both the required infrastructure and at least as much affordable housing as is currently secured through section 106 agreements, because despite the optimistic claims that successive Ministers have made and the claims that he made in debates this morning, nearly two years after the levy proposal was first put forward in the White Paper no evidence whatever has been published to demonstrate that the infrastructure levy is actually capable of achieving that. I look forward to hearing the Minister’s response.

[Rachael Maskell]

I am grateful to be called to speak to this set of amendments and thank my hon. Friend the Member for Greenwich and Woolwich for tabling them.

It is really important that we think about the consequences and what could happen. I reject the setting of infrastructure against affordable housing. If people are building any form of development, they will have to put infrastructure on that site, whether the infrastructure is a GP surgery, a school or some of the more micro infrastructure that is necessary for a community to function. As a result, the infrastructure will trump affordability in order to reach viability, so we will not see the affordable housing being built; in fact, if anything we will see a regression if the two are set against each other. For people to get the true value of developments with high-value accommodation, there will be a demand for infrastructure on the site. The developer will naturally focus on that and that will be how the situation turns.

It is also important to look at what will happen with this patchwork approach throughout the country, because if different areas set different levels of infrastructure levy, that will create a new market for where developers go and develop. Of course, they will be looking to their profit advantage over what the local communities need. The new system will be another pull: it will direct them to where they can get the deal that best suits them for developing the infrastructure that they want. It is going to skew an already bad situation into an even worse situation in respect of the need for affordable housing, let alone social housing. I cannot see how it is going to bring any advantage to a social developer, let alone a commercial developer, in trying to ensure that we get the mix of housing that we require in our communities. With affordable housing and social housing in particular being developed at such low levels compared with high-value housing—which, let us face it, is going over to being essentially an asset rather than lived-in accommodation—the differential is clearly going to cause a lot of challenge, and even greater challenge, for communities.

As we have debated, supporting infrastructure might not even be infrastructure: it could be services or something else. The provisions create risk in the legislation, so my hon. Friend’s amendments are about ameliorating that risk and ensuring that there is some level of protection to ensure that affordable housing is built.

[Tim Farron]

The No. 1 housing-related concern that I hear from my constituents is the absence of affordable places that they can find to live in, whether they be private rented, private bought or, in particular, social rented.

Perhaps some way down the list, but still high up it, is people’s real concern and anger when they see developments come to pass without infrastructure. We can talk about all sorts of different things. The hon. Member for York Central talked about doctors’ surgeries and school places, and there are sewers, drains, roads and all the other important infrastructure that underpins a successful development and means it does not put extra strain on existing infrastructure and therefore cause problems for and resentment on the part of neighbours and other developments, which in turns fuels opposition to future development.

--- Later in debate ---

[Mr Jones]

The hon. Member for Greenwich and Woolwich is correct to raise the importance of affordable housing delivery for local communities. Amendments 150 to 152 would prevent the infrastructure levy from being used to fund affordable housing, and I understand why he has tabled them. The provision of affordable housing is critical, and section 106 planning obligations currently deliver around half of all affordable housing in England. The Government do not want the new infrastructure levy to reduce the number of affordable homes that are secured when new development comes forward. In fact, the opposite is true: we are committed to the delivery of at least as much, if not more, on-site affordable housing through the infrastructure levy as is delivered through the current system of developer contributions.

Section 106 is an imperfect mechanism for securing affordable housing and can result in prolonged and costly negotiations that often generate outcomes that favour developers. Developers can often use their greater resources to negotiate policy-compliant levels of affordable housing downward on viability grounds. Local planning authorities tell us that the ability to secure developer contributions through negotiations is dependent on the individuals involved in the process. The amount that local authorities secure from developers will vary depending on which officers lead the negotiations, and their experience, strategy and confidence. This unpredictable element in the negotiation of section 106 obligations means that some authorities can secure more affordable housing than others, and that value that could be secured by local government instead goes to developers and landowners.

[Rachael Maskell]

The Minister is making the case that section 106 should be amended so that more power is given to local authorities. Why is he not taking that step to ensure that developers do not have the upper hand in negotiations?

[Mr Jones]

We are advocating delivering the same amount or more affordable homes through the infrastructure levy than are currently provided through section 106. That is based on the ability to capture more value from new development than is already the case, and the fact that there will be a more consistent approach that will not allow the current situation, wherein certain authorities that have the experience and ability at officer level to negotiate better section 106 agreements than others benefit significantly from being able to do so, compared with some authorities that do not appear to be in that position.

[Rachael Maskell]

I do not understand why the Minister does not just change the framework around the negotiations so that all authorities have the powers they need to get the outcomes they require, rather than introducing a system that will weaken the ability to determine what is actually good for a site and the infrastructure that communities need—let alone the affordable housing they desperately need.

[Mr Jones]

We are all concerned with making sure that we get as much affordable housing as we can from housing developments. Clearly, what I am arguing for is a wider package of measures that we believe will deliver at least as much affordable housing as under the current system, if not more, together with the infrastructure that communities need.

It is not fair that communities lose out just because their local authorities have effectively been strong-armed during the negotiation, and it is not fair that developers may face arbitrary variation in the demands for contributions in different places. If developers do not know how much they are going to have to pay, it is much harder for them to price contributions into land. There is currently an incentive to overpay for land and then try to negotiate contributions downwards.

To address the inequality of arms that the Committee has discussed, the new levy will introduce the right to require affordable housing through regulations. The right to require will enable local authorities to determine what proportion of the levy they want delivered in kind as affordable housing and what proportion they want delivered as cash. That will mean that local authorities, not developers, will get the final say on the proportion of affordable homes delivered as an in-kind levy contribution on a site. It is therefore important that affordable housing is considered as a kind of infrastructure that can fall within the levy regime.

It will be equally important that the levy delivers at least as much affordable housing as under the current system. That is why, when the levy rates are set, charging authorities must design them with regard to the desirability of ensuring that the rates can maintain or exceed the amount currently secured through developer contributions.

Let me address a couple of other points. The hon. Member for Greenwich and Woolwich was concerned about less-viable sites and lower-value sites. I reassure him that local authorities will set a minimum threshold that reflects build costs and existing use values, as well as setting levy rates. The minimum threshold will help to ensure that lower-value sites continue to come forward.

The hon. Member for York Central mentioned concerns about risk and about delivering affordable homes and infrastructure while the changes take place. I reassure her that, as we discussed in the earlier debate on the infrastructure levy, we will be driven by a test-and-learn approach. The lessons from that work will be learned to make sure that we achieve our objectives, and the places that are not using that approach in working with the new infrastructure levy will continue to work on the same basis as they do now until the new system is rolled out. I reassure the hon. Lady again that the process could take some years to achieve to make sure we get it right.

On that basis, I hope that the hon. Member for Greenwich and Woolwich will not press amendments 150 to 152 to a Division.

--- Later in debate ---

[Tim Farron]

When it comes to these issues, one of the things that makes people look heavenward and tut is the phrase “affordable housing”. Many people see it as a reference to homes that are anything but affordable. In my community, the average household income is less than £30,000 a year, and the average house price is more than a quarter of a million pounds. Given that a wise bank manager is not meant to give a mortgage for anything more than three and a half times someone’s income, the average house is two and a half times the upper limit of what ought to be offered to the average earner of average household earnings in my constituency. We see the problem.

Often, we see developments where homes are built for £180,000, £200,000 or £220,000, and are defined as affordable. They are not. We need a new term—a new name that demonstrates that something is genuinely affordable within the region for people on average and below average earnings, so that we can have a community that meets the needs of everybody, and not, as my area is increasingly becoming, somewhere that is only available for a new entrant if they have an awful lot of money and where, increasingly, those who are in private rented accommodation are not secure. They have been expelled in their thousands in the last year and a half alone, through section 21 evictions; the Government were meant to deal with that, and have failed to do so.

This series of amendments pushes the Government on an area of concern that we need to discuss far more: the lack of a proper, meaningful housing strategy. In reality, everything the Government propose to try to create genuinely affordable housing is via the infrastructure levy, and there is very little out there apart from that. We are far from convinced that the infrastructure levy will create any more genuinely affordable homes than those that exist already, and it may even create fewer, for the reasons we have set out.

We can juxtapose that with the complete failure to do anything proactive. Why are local authority council housing departments not allowed to borrow against the value of their stock? Why are we unable to do the things that would allow the Government to be, in many ways, the developer of last resort? Why are we not doing what we need to do to directly develop and build the homes that we patently need to be genuinely affordable? Here we are, talking about things that might make a difference at the edges, and even then allowing talk of affordable housing that is not affordable.

While nomenclature matters, the fact that we are debating this issue during consideration of these amendments is a reminder of how paltry the Government’s ambition is when it comes to genuinely meeting housing needs in this country. There is an opportunity to do something big—something Macmillanesque—and make a serious attempt to create homes for a new generation, instead of tinkering around the edge of the market with devices that may or may not work, and, if they do, will make little difference.

It is depressing having this debate on the margins, when the Government should be genuinely levelling up by investing and by allowing local authorities and housing associations to have the income and the powers to build the homes we genuinely need. Do not give developers the excuse to build homes that they say are affordable, but that are not really affordable.

[Rachael Maskell]

I, too, want to speak in favour of the four amendments before us. I will not go to Macmillan, but back to Nye Bevan. When he saw how broken the housing system was and how urgent the need was, he brought about a transformation in housing development for a generation, when the homes fit for heroes were built. It was good-quality social housing and housing that people could afford to live in.

In my community in York, we are looking at an affordability ratio of around 8.3, and it is getting harder by the day. Since we started debating the Bill in Committee, I have seen the development of another 133 short-term holiday lets—Airbnbs—in my community, and I am sure the rate of growth over the summer means that number has grown. We know that the nature of housing is complex and has changed, but we need to look at how we develop truly, genuinely affordable homes, which my constituents have to move out of the area to find.

A low-wage economy, such as in the hospitality sector, means that people cannot, and do not, come to work in the area. As a result, we have seen hospitality venues limit their opening times and become unable to benefit from the incoming community, which wants to see a wider offer, and from the tourism industry. That is having a cyclical, negative impact on the economy as well as the community. Those issues should be at the forefront when looking at housing reforms, and this Bill simply does not cut it.

From the moment in the main Chamber when we heard the Minister enhance the value of affordable homes, including those outside London, we all took a sharp breath, particularly those of us from areas that have a low-wage economy. The system is broken and the Bill simply does not tackle the challenges before us. These amendments are vital because they define what we mean by “affordability”, strengthen the Bill and ensure that we bring in the protections that are necessary.

A Minister in a new Government could completely change the definition of “affordability”, meaning we could be lumbered with a definition that does not apply to our situation. For example, my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) has said that the affordability ratio in her constituency is 16. How can housing be affordable with that sort of affordability ratio? It is baffling.

We need to have some sort of relationship to the reality of particular economies, and that is not reflected at all in the legislation. There will be very few places where we have the ratio of three and a half times a person’s salary, which I remember from when I bought my first home. Those kinds of ratios were much more affordable and genuine. That means that many people cannot get on the housing ladder, and are dependent on the private rented sector, which at the moment is flipping over to short-term holiday lets. There is a squeeze in the market on both sides. It simply is not working, and I cannot see that coming into play without this level of protection.

--- Later in debate ---

[Mr Jones]

As the hon. Member knows, when the 2008 Act was brought into effect by the last Labour Government, there was a reasonably wide definition of the different types of affordable housing. One of the evolutions in affordable housing recently has been the introduction of First Homes. I hear what the hon. Member for Greenwich and Woolwich says about that, but we are working to make sure that we have 1,500 first homes by the end of March 2023; that will be significant progress. The vast majority of affordable housing currently provided does fall within the definition that we have discussed, which was put into legislation in 2008, and we envisage that that will continue to be the case under the levy. However, accepting amendment 153 would mean placing a lot of reliance on the definition of social housing in the 2008 Act. Clearly, social housing is an extremely important part of the mix of affordable housing, but amendment 153 would reduce the levy’s ability to respond to any changes in tenure types that arise in the future. That is not helpful or necessary. It is right that the levy regulations should provide future-proofing and regulatory flexibility.

Amendment 154 deals with exemptions for sites that are 100% affordable housing. Subsection (5)(h) of proposed new section 204D of the Planning Act 2008, in schedule 11 of this Bill, already contains a power for levy regulations to make provision about exemptions from or reductions in levy liability. The levy will be used to secure contributions towards affordable housing. We do not expect to charge the levy on exclusively affordable housing developments; we will explore that matter further in consultation. However, all development will be required to deliver the infrastructure that is integral to the functioning of the site, and we will retain the use of planning conditions and restricted use of section 106 agreements to secure that.

Amendment 155 would require infrastructure levy rates to be set at a level that enables an authority to meet the affordable housing need specified in a local development plan. The total value that can be captured by the levy, or indeed any system of developer contributions, will not necessarily match the costs of meeting the entire affordable housing need of an area as specified in the local development plan. Revenues will depend on the amount and types of development that come forward, and when they come forward, as much as on the levy rates and thresholds set. That said, the Bill recognises the importance of using the levy to deliver affordable housing. Proposed new section 204G of the Planning Act 2008, in schedule 11, provides that charging authorities must, when setting their rates, have regard to the desirability of ensuring that affordable housing funding from developer contributions equals or exceeds present levels. That will ensure that affordable housing need is accounted for when levy rates are set; to ensure that, those rates will be subject to public examination.

Importantly, the Bill makes provision for rates to be set with regard to increases in land value—for instance, as a result of planning permission. Targeted increases in rates will allow charging authorities to maximise the revenue that they can capture, and the amount of affordable housing that they can deliver.

We have designed the levy so that it can deliver at least as much affordable housing as the current system, if not more. As I have explained, the new right to require will require affordable housing to be provided. That will be introduced through regulations. That means that local authorities will get the final say on the proportion of levy contributions that go towards affordable homes. Should the levy generate more revenue than at present, local authorities could choose to direct those additional revenues towards meeting their additional affordable housing needs.

[Rachael Maskell]

How are local authorities making calculations about the loss of affordable housing? Clearly, if we just look at new developments, we could say, “There is this growth in affordable housing”, but if authorities are losing stock, the proportion of affordable housing in a community is decreasing. How will that be addressed? If the local plan is just about future developments, should there not be some adjustment for the loss in existing stock? I am talking about not just social stock, but ownership stock.

[Mr Jones]

I thank the hon. Member for that point. Like many other areas, York’s housing market is affected by the tourist industry that the city attracts. It is for local areas—I am glad that the hon. Member’s area is forming a local plan—to assess the housing need in their local plan; they should take matters such as the amount of affordable housing, and the need in an area, into account when making that plan.

Local authorities will need to balance the objective of providing affordable housing with the levy’s other aspirations. Local authorities will need to use the levy revenues to deliver other critical infrastructure, such as new roads and medical facilities. Local authorities, which know their local areas, are best placed to balance funding for affordable housing with funding for other infrastructure needs.

On amendment 156, proposed new section 204Q, introduced by schedule 11, introduces the requirement for levy charging authorities to prepare an infrastructure delivery strategy, which will outline how a local authority will use the money the levy generates through a strategic spending plan. That will include an outline of how it will use levy revenues to secure affordable housing. It is important that that happens in each area. The charging authority will have regard to that when setting levy rates. The exact detail of the infrastructure delivery strategy and how it should be produced will be determined through regulations. We will consult on matters relating to the infrastructure delivery strategy, and forthcoming secondary legislation and guidance will clarify how to treat affordable housing. All of that will be informed by our commitment to deliver at least as much affordable housing as we do under the current system.

I hope that my explanation gives the hon. Member for Greenwich and Woolwich clear assurances on how the new levy will support the delivery of affordable housing, and therefore I ask him to withdraw the amendment.

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[Mr Jones]

Proposed new section 204F of the Planning Act 2008 makes provision requiring an exemption from paying the levy where the party liable to pay is a charity and where the building or structure will be used for a charitable purpose. “Charitable purpose” here has the meaning in section 2 of the Charities Act 2011. It is something that is “for the public benefit” and is for a specific purpose, such as the prevention or relief of poverty, the advancement of education, health, the arts or sport, or the provision of relief to those in need. That kind of development is entitled to exemption from the levy in its entirety.

Under the current system of section 106 planning obligations, an obligation can constitute a reason to grant planning permission only if it is directly related to the development. For that reason, affordable housing contributions tend to be sought on residential developments. Amendment 158 would substantially extend the range of development required to deliver contributions towards affordable housing, including non-residential charitable development. In general, we oppose the amendment because it is not appropriate for charities providing services for the public benefit to also be required to provide affordable housing. It would be unfortunate if all kinds of charitable development, from drug treatment facilities to village halls, became economically unviable because we required them to fund an element of affordable housing as well.

[Rachael Maskell]

It is becoming clear in the debate that there are charities and charities. Some charities are run by major businesses and make a profit. Say a private school was disposing of a playing field that would then be used for the development of unaffordable housing to provide significant funding. Should that private school be exempt because it has charitable status under the Charities Act? Would that be right, because surely it is acting like any other business?

[Mr Jones]

The hon. Member makes a very good point. A charity that builds something that is not for a charitable purpose would not be subject to an exemption from the levy under proposed new section 204F. For example, feeding into what she said, if a charity were delivering market housing, that would be unlikely to meet the definition of a charitable purpose. If there are specific scenarios where contributions should be sought, the Bill enables us to consider them as part of the development of the levy’s regulations. More broadly, we will consult on the types of exemptions that should apply to the levy prior to laying the regulations before the Commons for approval. For those reasons, amendment 158 is not necessary.

[Rachael Maskell]

I want to test another scenario. Say the same educational establishment develops a nursery on that site, but the nursery has a commercial interest. Under the debate that we had about the provision of services, that could be seen as one of the services that could come under the infrastructure levy. A nursery could be a profit-making opportunity for said institution, while also providing support for children under the Government’s funding for nurseries. Would that be included or excluded from the scheme that the Minister is outlining?

[Mr Jones]

I thank the hon. Member for that question. I will not get drawn into lots of different examples, but we are very clear that we are talking about charitable purposes under the definition in the 2011 Act.

Turning to amendments 159 and 160, there may be other instances where an institution is established for charitable purposes but does not meet the definition of a charity—for example, a charity established in Scotland, Northern Ireland or overseas. Amendments 159 and 160 would remove the express ability for regulations to set exemptions or reductions in the levy for these types of institutions. This would mean that only English and Welsh charities could be exempt from the levy when delivering development for charitable purposes. While we recognise that this will be less common, it would still be unfortunate if other types of charitable institutions could not deliver important facilities because of increased costs from the levy.

We are aware that different charitable institutions may operate differently from English and Welsh charities. That is why it is important to maintain a separate power to prescribe in regulations in detail the levy liabilities of such institutions. That enables provision to be made in the regulations, which will keep up with future changes that might be made to charities law. There will also be instances where a charitable institution carries out development that itself is not for charitable purposes but that it should none the less be able to claim an exemption or reduction for.

In the current CIL system, the CIL regulations make use of this power to provide for relief from CIL liability at the discretion of the local authority for developments carried out by charities for investment purposes. This approach works, which is why we do not agree with amendments 159 and 160, which would remove the express ability to set this kind of exemption or reduction through regulations in the future.

I hope that I have provided helpful clarification to the hon. Member for Greenwich and Woolwich and other members of the Committee. I therefore kindly ask the hon. Member to withdraw his amendment.

[Matthew Pennycook]

I am partly reassured by what the Minister said, not least because he clearly indicated that the Government are going to go away and give further consideration to designing regulations. However, I urge him—or his successor when he is promoted—to really look into this issue, because I think there is a chance here, as Members have commented on, for a loophole to be exploited in ways that would cut across the purposes of the Bill as per the Government’s thinking. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 167, in schedule 11, page 287, line 28, at end insert—

“204FA Social enterprises and community interest companies

(1) IL regulations must provide for an exemption from liability to pay IL in respect of a development where—

(a) the person who would otherwise be liable to pay IL in respect of the development is a social enterprise or a community interest company, and

(b) the building or structure in respect of which IL liability would otherwise arise is to be used wholly or mainly for the purposes of social enterprise or the community interest.

(2) IL regulations may—

(a) provide for an exemption from liability to pay IL where the person who would otherwise be liable to pay IL in respect of the development is a social enterprise or a community interest company;

(b) require charging authorities to make arrangements for an exemption from, or reduction in, liability to pay IL where the person who would otherwise be liable to pay IL in respect of the development is a social enterprise or a community interest company.

(3) Regulations under subsection (1) or (2) may provide that an exemption or reduction does not apply if specified conditions are satisfied.”

This amendment makes equivalent provisions about the Infrastructure Levy for social enterprise or community interest companies as it does for charities under inserted section 204F.

The reason for the amendment is that there are different forms of businesses across communities. At this point, I should declare an interest as a Member of the Co-operative party. Social business is really important across our communities. Social businesses, enterprises and community interest companies have a different focus from the run-of-the-mill business. They are not there for profit. They are there to reinvest in their service users and facilities and to give back to their communities.

I think there is a real anomaly in the legislation. Today, the voluntary, community and social enterprise sector is referred to as one, recognising the charitable aims and social aims that these organisations bring. In moving the amendment, I am looking for parity, to recognise the fact that not-for-profit organisations—community interest companies and social enterprises—make an investment in their communities. They can make an investment by employing people from a place of disadvantage and by giving people opportunities in life. However, they are businesses as well, running cafés, for instance. Obviously they reinvest the proceeds they make into people in the community or they perhaps run a nursery or another form of business. We have seen the real benefit that that brings—it certainly addresses the levelling-up agenda. It enables people to move forward in their social mobility journey.

These organisations often start out with no assets whatever. They are very small. They build, reinvest and grow, which is good for the local economy. We need only to look at Preston as an example. It has invested—I look at the Chair, who is the MP for Preston—in the community. It has invested in the model of social business as well, and we know the importance of that. We want to see that rolled out across our communities. If these organisations grow and want to invest more and further benefit the community, but they then have to pay the infrastructure levy, that will curtail the opportunities that they can bring to our communities, and we do not want to see that. We want to see community interest companies, co-operatives and social businesses grow in a way that allows them to reinvest in our communities.

One thing that I have found most inspiring over the last few weeks is meeting organisations that are putting incubators for social enterprises in their communities—again, with no asset, but they provide an opportunity to bring forward a generation of new community interest companies and social enterprises. I have seen a little bit of that on the SPARK site in York, which really has put a spark into York. It is built out of old containers on a site and has brought a new energy into the city centre. It has been a fantastic opportunity, running and helping businesses to develop the ethos of community interest companies as they move forward.

I do not understand why in the legislation credible social businesses, social enterprises and community interest companies do not have exemptions when they give so much back to our communities and bring real transformation to our society. I want the amendment to be made. It is an omission; perhaps the Minister will explain why such an omission was made. Will he also reflect on the charities when it comes to the consultation and looking at further regulations? Will he include social enterprises and community interest companies in the substantive next phase of the legislation?

[Mr Jones]

As I said under amendment 158, proposed new section 204F of the Planning Act 2008 allows for certain charities carrying out development for charitable purposes to be exempt from the levy. Proposed new section 204D(5)(h) also provides powers to exempt or reduce levy liabilities through regulations. This would allow us to set national exemptions or reductions where it is appropriate for other types of development by other types of organisations. When considering the approach to exemptions and reductions, we will need to consider a wide range of development types, including those put forward by the amendment. There is an important balance to strike. Although we will explore national exemptions and reductions to the levy, we want local authorities to be able to make their own decisions about how they might want levy exemptions to apply.

[Rachael Maskell]

I am grateful to the Minister for making that point. Obviously, if local authorities are going to make such determinations, they will have to look for the maximum opportunity. As the legislation is unamended, they will also seek to subsidise the affordability of housing as well. It is very unlikely that a local authority will then look for wider exemptions from the infrastructure levy, so I cannot see how that would work in practice to deliver the objective to which the Minister refers.

[Mr Jones]

I was just bringing it to the hon. Member’s attention that there is a balance to strike in these matters. Clearly national exemptions are an important part of this, but we want to give a certain amount of local flexibility. Our forthcoming consultation on the infrastructure levy will explore this question further. It will allow us to look at the case for exemptions in the round, and decide what types of developments should not be subject to the charge, or should be subject to a reduced charge. Following consultation we will set out in regulations where a charge to the levy will not apply. Those regulations will be subject to debate in Committee and approval in the House. On that basis, I do not consider the amendment necessary and kindly ask her to withdraw it.

[Rachael Maskell]

I have been reassured by the Minister that this will form part of the wider consultation process in the next stage. We will look at that with interest. Clearly, we will want to follow this through in later stages, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Greg Smith (Buckingham) (Con)]

I beg to move amendment 58, in schedule 11, page 287, line 33, at end insert—

“(1A) A charging schedule may—

(a) require a developer to pay their full IL liability for a development before being permitted to commence work on that development,

(b) require infrastructure funded by IL associated with a development to be built before work on that development may commence.”

This amendment would enable Infrastructure Levy charging authorities to require a developer to pay their full IL liability, or for infrastructure funded by IL associated with a development to be built, before development may commence.

--- Later in debate ---

[Tim Farron]

Amendment 58 is really interesting, and probes the Government on an issue that I am also concerned about. The hon. Member for Buckingham set out the case well and I also very much hear the challenges and counterpoints from the hon. Member for Greenwich and Woolwich.

We can all point to developments in our communities where we have seen new housing created without adequate infrastructure being provided. Often, we are talking about utilities such as sewage and draining, and the additional pressure put on those services that they cannot meet. There is clearly huge merit in what is being suggested, because it locks the developer in. I referred earlier to the Church Bank Gardens development in Burton-in-Kendal, where the homes are built and the infrastructure is still not there. The footpaths are not put right. Much of the infrastructure has not been done at all. The road has not been put right. There is often a lack of trust—a sense that the developer will seek to get the benefit of a development without providing the services that were surely part and parcel of the conditions of developing it. The hon. Member for Buckingham is right to press the point, and I hope the Government will take it seriously.

It is important to bear in mind what we are talking about when we think about infrastructure. Several people, me included, have cited GP surgeries, for example, as part of the infrastructure that we would want to have underpinned. I want to be very careful that we do not allow integrated care boards, as they are now, and the Government as a whole to skimp on the provision of GP surgeries, particularly in existing communities, and assume that somehow developers will pick up the tab for them. As we struggle to keep our surgeries in Ambleside and Hawkshead, the issue is not developers not paying the infrastructure levy. The issue is shocking Government cuts in the funding of GP surgeries and complete inflexibility from the new integrated care boards, so let us be careful, when we talk about supporting infrastructure, which we must, and about getting it in place before new developments, that we do not lift or shift responsibility away from our NHS managers and from the Department of Health and Social Care and other Departments.

[Rachael Maskell]

I rise to make a brief point. It is more about the scope of what we have discussed—the infrastructure levy being able to contribute to affordable housing and social housing within a development. One of my fears is that everything is left to the end; it is left to the end to calculate everything, and we end up with what has happened at St Peters Quarter, in York, with the high-value housing—beautiful, spacious housing—in one area and then the section 106 housing in the corner, where there is no proper infrastructure to support it because there is no money left. We therefore get real segregated communities.

I go back to the report that John Hills wrote in 2007. I was at a meeting with him, discussing the report, and he was talking about the importance of place making and mixed communities. We could be in danger of ending up with more divided communities if everything is paid at the end. Therefore scheduling payment is really important. Developers know that that money will have to be paid, and we should ensure that it can be paid in a timely way so that we do not end up with the scenario that we have articulated so much with either the section 106 provision coming never or the infrastructure levy money not delivering on the expectation at the start of the planning process. That could of course occur, but, even worse, we could end up with really divided and segregated communities when we know that the strength and resilience of communities comes where we see that housing jumbled up.

A good example would be Derwenthorpe, in York, where it is not possible to tell what is a social house, what is a privately owned home or where there is equity sharing or anything else, because the houses are all the same and people live in a very mixed and diverse community. That has built strong resilience in the community.

We need to think about more than just housing; we need to think of place making, which I know is Homes England’s real objective. Of course, by holding everything back to the very last minute, we are in danger of not having that. Properly scheduling payment of the infrastructure levy will ensure that we get the proper places that people want to live in and that we build resilience across all communities, as opposed to dividing communities and then developing areas that will create social challenges in the future.

[Mr Jones]

I thank my hon. Friend the Member for Buckingham for his contribution to the debate on the levy today. Even though it is an inviting proposition, I do not think it would be wise for me to start to try to pre-empt the policy of the new Government, but what I will do is focus on amendments 58 and 161, which are before us.

Charging the levy on the basis of gross development value, which will be the sales value of the development that is sold, will enable the levy to capture more of the increases in development value that occur over time. That will result in better opportunity to capture more value from development to put towards infrastructure and services. Later payments will also reduce demands initially on developer cash flow, and the returns necessary to make a development worth while, because payments will not be required up front.

Payments may be made later, but we recognise the importance of the infrastructure levy supporting the timely provision of local infrastructure alongside new development, so that homes are supported by the right services. That is why it will be possible for local authorities to borrow against future levy liabilities, so they can forward-fund infrastructure.

We are also introducing infrastructure delivery strategies that will drive local authorities to plan more effectively for the best use of levy revenues. On the majority of sites, levy contributions towards infrastructure will be secured in cash, creating a simpler, streamlined system. Developers will, however, still need to deliver the infrastructure on site that is integral to the use of the site, including access roads and flood risk mitigations.

In addition, as we have debated, on larger, more complex sites, we intend to retain the use of section 106 planning obligations to secure in-kind delivery of infrastructure. Such contributions will be offset against the levy liability and the timing of their delivery can be negotiated.

Nevertheless, we recognise that there are circumstances in which early payment and payment by instalments may well be appropriate. That is why the Bill provides powers to allow for that under proposed new section 204R(2) of the Planning Act 2008, which is in schedule 11.

Levelling-up and Regeneration Bill (Nineteeth sitting)

Rachael Maskell Excerpts

Committee stage
Tuesday 6th September 2022 Public Bill Committees

[Rachael Maskell (York Central) (Lab/Co-op)]

Could the Minister give some examples of what those extensive directions could include, because that is not made clear in the Bill?

[Mr Jones]

If the hon. Member bears with me for a moment, I will give her an example.

The measure will enable regulations to set out the circumstances where charging authorities could spend a specified amount of the levy on items that are not infrastructure. This means that in some areas, once local authorities are able to meet their affordable housing and infrastructure needs, they could have scope to increase their flexibility on what they spend levy receipts on, such as improving local services. This would remain a matter for the local authority to decide on, subject to any limitations set out in regulation or guidance, ensuring that infrastructure and affordable housing remain priorities. Furthermore, it is right that even if such extended funding of the levy is permitted and taken up by the local authority, it should be subject to the overall test in proposed new section 204A that such costs must not make the development an area economically unviable. Therefore, we do not believe the amendment is necessary, so I ask the hon. Member for Greenwich and Woolwich to withdraw it.

--- Later in debate ---

[Matthew Pennycook]

As the Minister made clear this morning, the Government are not willing to give charging authorities discretion when it comes to adopting the infrastructure levy, or any freedom to determine the best metric upon which to calculate IL rates. However, I want to try to persuade him to reconsider using the levy to deliver affordable housing.

Amendment 150 would insert into proposed new section 204A a proposed new subsection making clear that the intention of IL is to enable charging authorities to raise money to fund infrastructure to support the development of their areas, while allowing planning obligations under section 106 of the Town and Country Planning Act 1990 to continue to be used to provide affordable housing and to ensure that development is acceptable in planning terms.

Amendments 151 and 152 would make consequential changes to the schedule, respectively removing affordable housing from the list of what is designated as infrastructure and preventing regulations from reinserting it into that list at a later date.

When I spoke to amendments 142 and 143 and amendments 145 to 147, I set out our two main concerns about the new levy—namely, that it is likely to prove onerously complicated to operate in practice and that it will almost certainly lead to less infrastructure and less affordable housing overall than those secured under the present system. It is the second of these concerns that lies behind amendments 150, 151 and 152.

Under the present system, funds raised through the community infrastructure levy are used only to fund infrastructure, facilities and services that support development in a given area. It is individual section 106 agreements that, along with any grant funding secured, pay for affordable housing. Under the new system, which is premised on affordable housing as well as all other required infrastructure being funded through a single mechanism, local planning authorities will be forced to set IL at significantly higher rates than the community infrastructure levy, which is typically equivalent to a relatively small proportion of development value.

The obvious resulting risk of having to set such high rates is that development on less viable sites, the majority of which are concentrated in those parts of the country most in need of levelling up and which the Government say is their mission to help, will simply not happen. As such, local planning authorities in areas with higher risk to viability of brownfield sites will be left with a choice: either allow such sites to remain undeveloped, or lower IL rates sufficiently to incentivise development on them but forgo essential infrastructure and affordable housing from more viable sites as a result. In practice, both outcomes are likely to materialise. If that is the case, it will have significant implications for the supply of infrastructure and high-quality affordable housing across the country.

There are very good reasons for the Government to reconsider funding affordable housing through the new levy, and I want to briefly speak to a number of them. First, there has never been a previous attempt to implement a single fixed-rate levy mechanism for securing both infrastructure and affordable housing. That is not for want of some extremely clever people attempting to design such mechanisms, but the desire to incorporate affordable housing into previous systems, including CIL, was ultimately abandoned, because each time they were deemed to be inoperable in practice. That is an obvious warning that the Government would do well to heed.

Secondly, as we have already discussed in the debate on the first group of amendments to part 4, by systematically financialising the provision of affordable housing, and for that matter on-site infrastructure, with the inherent variability and uncertainty that that entails, the levy is likely to unnecessarily complicate the planning process, resulting in additional delays, disputes and resourcing pressures.

Thirdly, the rigidity inherent in applying one or more IL rates in any given charging area to sites within it that will inevitably vary in terms of development and land values will result in a wide range of levels of affordable housing and infrastructure contributions across sites. That is inherent to the design of the levy. As a result, it will be incredibly difficult for local planning authorities to know what levy rates to set in order to fund all necessary infrastructure and meet the affordable housing need identified in their local development plans.

Fourthly, there are inherent problems when it comes to attempting to provide affordable housing through a rigid fixed-charge approach, because of how such a charge interacts with viability. If the Government are adamant about pursuing a fixed-charge approach, they could always consider a fixed-percentage affordable housing requirement delivered through section 106 agreements, which would be preferable to a general levy calculated on the basis of gross development value.

By amending the national planning policy framework as they have done, to place greater emphasis on viability testing as a part of plan-making rather than as a feature of individual site applications, the Government have already firmed up affordable housing requirements while still allowing for flexibility in exceptional cases where there are genuine viability challenges. In our view, the current arrangement strikes the right balance and, as I said this morning, the Government’s time would be better spent focusing on what more could be done—for example, by equipping local authorities with the specialist skills and resources that they need to make the existing system work more effectively.

Lastly, and related to the previous point, setting a fixed IL rate or rates will inevitably result in the loss of affordable housing supply on every site in a given charging area that could viably deliver more than the rate in question would require, while at the same time putting at risk entirely the development of sites grappling with genuine viability challenges that would be unable to provide the requisite level of contributions. That problem is inherent to the nature of a levy premised on a general fixed rate or rates within charging areas where there is variation in values and costs between sites.

Whichever side of the line individual charging authorities ultimately come down on, the overall result will be lower rates of affordable housing delivery in England. If local planning authorities try to overcome that inherent flaw in the proposed levy system by setting myriad different IL rates, in an attempt to respond to the natural variation in development and land values in any given area, the result will be a smorgasbord of rates, which would make for a fantastically complicated arrangement that would make it hard, if not impossible, for developers and communities to understand the extent and nature of the contributions due on different sites in a given locality.

It is telling that despite the Government’s commitment to the levy securing at least as much affordable housing as developer contributions do now, there is nothing in the Bill that guarantees that that will be the case. We need to be confident that we are approving a framework that has a reasonable chance of at least maintaining the supply of affordable housing that we currently secure through developer contributions, and ideally one that allows for improvements to allow that supply to increase, because it needs to increase markedly.

Short of giving charging authorities discretion in relation to adopting the infrastructure levy and the freedom to determine the best metric on which to calculate IL rates, limiting the scope of the levy to the delivery of actual infrastructure and retaining the use of section 106 to fund affordable housing, as amendments 150 to 152 propose, is the best means of achieving that aim, because it would overcome the problems with the setting of IL rates that I have described and the impact that fixed rates will have on overall levels of affordable housing secured through developer contributions. It would also directly address an issue we have not discussed—namely that a fixed levy would not be capable of determining affordable housing requirements for estate regeneration schemes, which necessarily vary from site to site, depending on the existing level of affordable housing that should be re-provided and how much additional affordable housing can be delivered.

I trust that the Minister has carefully considered the arguments I have made and will consider accepting the amendments, which would make the Government’s levy proposals far more workable than they currently are. Either way, he really does owe the Committee an explanation of how the levy will operate in such a way as to ensure that developments are viable and deliver both the required infrastructure and at least as much affordable housing as is currently secured through section 106 agreements, because despite the optimistic claims that successive Ministers have made and the claims that he made in debates this morning, nearly two years after the levy proposal was first put forward in the White Paper no evidence whatever has been published to demonstrate that the infrastructure levy is actually capable of achieving that. I look forward to hearing the Minister’s response.

[Rachael Maskell]

I am grateful to be called to speak to this set of amendments and thank my hon. Friend the Member for Greenwich and Woolwich for tabling them.

It is really important that we think about the consequences and what could happen. I reject the setting of infrastructure against affordable housing. If people are building any form of development, they will have to put infrastructure on that site, whether the infrastructure is a GP surgery, a school or some of the more micro infrastructure that is necessary for a community to function. As a result, the infrastructure will trump affordability in order to reach viability, so we will not see the affordable housing being built; in fact, if anything we will see a regression if the two are set against each other. For people to get the true value of developments with high-value accommodation, there will be a demand for infrastructure on the site. The developer will naturally focus on that and that will be how the situation turns.

It is also important to look at what will happen with this patchwork approach throughout the country, because if different areas set different levels of infrastructure levy, that will create a new market for where developers go and develop. Of course, they will be looking to their profit advantage over what the local communities need. The new system will be another pull: it will direct them to where they can get the deal that best suits them for developing the infrastructure that they want. It is going to skew an already bad situation into an even worse situation in respect of the need for affordable housing, let alone social housing. I cannot see how it is going to bring any advantage to a social developer, let alone a commercial developer, in trying to ensure that we get the mix of housing that we require in our communities. With affordable housing and social housing in particular being developed at such low levels compared with high-value housing—which, let us face it, is going over to being essentially an asset rather than lived-in accommodation—the differential is clearly going to cause a lot of challenge, and even greater challenge, for communities.

As we have debated, supporting infrastructure might not even be infrastructure: it could be services or something else. The provisions create risk in the legislation, so my hon. Friend’s amendments are about ameliorating that risk and ensuring that there is some level of protection to ensure that affordable housing is built.

[Tim Farron]

The No. 1 housing-related concern that I hear from my constituents is the absence of affordable places that they can find to live in, whether they be private rented, private bought or, in particular, social rented.

Perhaps some way down the list, but still high up it, is people’s real concern and anger when they see developments come to pass without infrastructure. We can talk about all sorts of different things. The hon. Member for York Central talked about doctors’ surgeries and school places, and there are sewers, drains, roads and all the other important infrastructure that underpins a successful development and means it does not put extra strain on existing infrastructure and therefore cause problems for and resentment on the part of neighbours and other developments, which in turns fuels opposition to future development.

--- Later in debate ---

[Mr Jones]

The hon. Member for Greenwich and Woolwich is correct to raise the importance of affordable housing delivery for local communities. Amendments 150 to 152 would prevent the infrastructure levy from being used to fund affordable housing, and I understand why he has tabled them. The provision of affordable housing is critical, and section 106 planning obligations currently deliver around half of all affordable housing in England. The Government do not want the new infrastructure levy to reduce the number of affordable homes that are secured when new development comes forward. In fact, the opposite is true: we are committed to the delivery of at least as much, if not more, on-site affordable housing through the infrastructure levy as is delivered through the current system of developer contributions.

Section 106 is an imperfect mechanism for securing affordable housing and can result in prolonged and costly negotiations that often generate outcomes that favour developers. Developers can often use their greater resources to negotiate policy-compliant levels of affordable housing downward on viability grounds. Local planning authorities tell us that the ability to secure developer contributions through negotiations is dependent on the individuals involved in the process. The amount that local authorities secure from developers will vary depending on which officers lead the negotiations, and their experience, strategy and confidence. This unpredictable element in the negotiation of section 106 obligations means that some authorities can secure more affordable housing than others, and that value that could be secured by local government instead goes to developers and landowners.

[Rachael Maskell]

The Minister is making the case that section 106 should be amended so that more power is given to local authorities. Why is he not taking that step to ensure that developers do not have the upper hand in negotiations?

[Mr Jones]

We are advocating delivering the same amount or more affordable homes through the infrastructure levy than are currently provided through section 106. That is based on the ability to capture more value from new development than is already the case, and the fact that there will be a more consistent approach that will not allow the current situation, wherein certain authorities that have the experience and ability at officer level to negotiate better section 106 agreements than others benefit significantly from being able to do so, compared with some authorities that do not appear to be in that position.

[Rachael Maskell]

I do not understand why the Minister does not just change the framework around the negotiations so that all authorities have the powers they need to get the outcomes they require, rather than introducing a system that will weaken the ability to determine what is actually good for a site and the infrastructure that communities need—let alone the affordable housing they desperately need.

[Mr Jones]

We are all concerned with making sure that we get as much affordable housing as we can from housing developments. Clearly, what I am arguing for is a wider package of measures that we believe will deliver at least as much affordable housing as under the current system, if not more, together with the infrastructure that communities need.

It is not fair that communities lose out just because their local authorities have effectively been strong-armed during the negotiation, and it is not fair that developers may face arbitrary variation in the demands for contributions in different places. If developers do not know how much they are going to have to pay, it is much harder for them to price contributions into land. There is currently an incentive to overpay for land and then try to negotiate contributions downwards.

To address the inequality of arms that the Committee has discussed, the new levy will introduce the right to require affordable housing through regulations. The right to require will enable local authorities to determine what proportion of the levy they want delivered in kind as affordable housing and what proportion they want delivered as cash. That will mean that local authorities, not developers, will get the final say on the proportion of affordable homes delivered as an in-kind levy contribution on a site. It is therefore important that affordable housing is considered as a kind of infrastructure that can fall within the levy regime.

It will be equally important that the levy delivers at least as much affordable housing as under the current system. That is why, when the levy rates are set, charging authorities must design them with regard to the desirability of ensuring that the rates can maintain or exceed the amount currently secured through developer contributions.

Let me address a couple of other points. The hon. Member for Greenwich and Woolwich was concerned about less-viable sites and lower-value sites. I reassure him that local authorities will set a minimum threshold that reflects build costs and existing use values, as well as setting levy rates. The minimum threshold will help to ensure that lower-value sites continue to come forward.

The hon. Member for York Central mentioned concerns about risk and about delivering affordable homes and infrastructure while the changes take place. I reassure her that, as we discussed in the earlier debate on the infrastructure levy, we will be driven by a test-and-learn approach. The lessons from that work will be learned to make sure that we achieve our objectives, and the places that are not using that approach in working with the new infrastructure levy will continue to work on the same basis as they do now until the new system is rolled out. I reassure the hon. Lady again that the process could take some years to achieve to make sure we get it right.

On that basis, I hope that the hon. Member for Greenwich and Woolwich will not press amendments 150 to 152 to a Division.

--- Later in debate ---

[Tim Farron]

When it comes to these issues, one of the things that makes people look heavenward and tut is the phrase “affordable housing”. Many people see it as a reference to homes that are anything but affordable. In my community, the average household income is less than £30,000 a year, and the average house price is more than a quarter of a million pounds. Given that a wise bank manager is not meant to give a mortgage for anything more than three and a half times someone’s income, the average house is two and a half times the upper limit of what ought to be offered to the average earner of average household earnings in my constituency. We see the problem.

Often, we see developments where homes are built for £180,000, £200,000 or £220,000, and are defined as affordable. They are not. We need a new term—a new name that demonstrates that something is genuinely affordable within the region for people on average and below average earnings, so that we can have a community that meets the needs of everybody, and not, as my area is increasingly becoming, somewhere that is only available for a new entrant if they have an awful lot of money and where, increasingly, those who are in private rented accommodation are not secure. They have been expelled in their thousands in the last year and a half alone, through section 21 evictions; the Government were meant to deal with that, and have failed to do so.

This series of amendments pushes the Government on an area of concern that we need to discuss far more: the lack of a proper, meaningful housing strategy. In reality, everything the Government propose to try to create genuinely affordable housing is via the infrastructure levy, and there is very little out there apart from that. We are far from convinced that the infrastructure levy will create any more genuinely affordable homes than those that exist already, and it may even create fewer, for the reasons we have set out.

We can juxtapose that with the complete failure to do anything proactive. Why are local authority council housing departments not allowed to borrow against the value of their stock? Why are we unable to do the things that would allow the Government to be, in many ways, the developer of last resort? Why are we not doing what we need to do to directly develop and build the homes that we patently need to be genuinely affordable? Here we are, talking about things that might make a difference at the edges, and even then allowing talk of affordable housing that is not affordable.

While nomenclature matters, the fact that we are debating this issue during consideration of these amendments is a reminder of how paltry the Government’s ambition is when it comes to genuinely meeting housing needs in this country. There is an opportunity to do something big—something Macmillanesque—and make a serious attempt to create homes for a new generation, instead of tinkering around the edge of the market with devices that may or may not work, and, if they do, will make little difference.

It is depressing having this debate on the margins, when the Government should be genuinely levelling up by investing and by allowing local authorities and housing associations to have the income and the powers to build the homes we genuinely need. Do not give developers the excuse to build homes that they say are affordable, but that are not really affordable.

[Rachael Maskell]

I, too, want to speak in favour of the four amendments before us. I will not go to Macmillan, but back to Nye Bevan. When he saw how broken the housing system was and how urgent the need was, he brought about a transformation in housing development for a generation, when the homes fit for heroes were built. It was good-quality social housing and housing that people could afford to live in.

In my community in York, we are looking at an affordability ratio of around 8.3, and it is getting harder by the day. Since we started debating the Bill in Committee, I have seen the development of another 133 short-term holiday lets—Airbnbs—in my community, and I am sure the rate of growth over the summer means that number has grown. We know that the nature of housing is complex and has changed, but we need to look at how we develop truly, genuinely affordable homes, which my constituents have to move out of the area to find.

A low-wage economy, such as in the hospitality sector, means that people cannot, and do not, come to work in the area. As a result, we have seen hospitality venues limit their opening times and become unable to benefit from the incoming community, which wants to see a wider offer, and from the tourism industry. That is having a cyclical, negative impact on the economy as well as the community. Those issues should be at the forefront when looking at housing reforms, and this Bill simply does not cut it.

From the moment in the main Chamber when we heard the Minister enhance the value of affordable homes, including those outside London, we all took a sharp breath, particularly those of us from areas that have a low-wage economy. The system is broken and the Bill simply does not tackle the challenges before us. These amendments are vital because they define what we mean by “affordability”, strengthen the Bill and ensure that we bring in the protections that are necessary.

A Minister in a new Government could completely change the definition of “affordability”, meaning we could be lumbered with a definition that does not apply to our situation. For example, my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) has said that the affordability ratio in her constituency is 16. How can housing be affordable with that sort of affordability ratio? It is baffling.

We need to have some sort of relationship to the reality of particular economies, and that is not reflected at all in the legislation. There will be very few places where we have the ratio of three and a half times a person’s salary, which I remember from when I bought my first home. Those kinds of ratios were much more affordable and genuine. That means that many people cannot get on the housing ladder, and are dependent on the private rented sector, which at the moment is flipping over to short-term holiday lets. There is a squeeze in the market on both sides. It simply is not working, and I cannot see that coming into play without this level of protection.

--- Later in debate ---

[Mr Jones]

As the hon. Member knows, when the 2008 Act was brought into effect by the last Labour Government, there was a reasonably wide definition of the different types of affordable housing. One of the evolutions in affordable housing recently has been the introduction of First Homes. I hear what the hon. Member for Greenwich and Woolwich says about that, but we are working to make sure that we have 1,500 first homes by the end of March 2023; that will be significant progress. The vast majority of affordable housing currently provided does fall within the definition that we have discussed, which was put into legislation in 2008, and we envisage that that will continue to be the case under the levy. However, accepting amendment 153 would mean placing a lot of reliance on the definition of social housing in the 2008 Act. Clearly, social housing is an extremely important part of the mix of affordable housing, but amendment 153 would reduce the levy’s ability to respond to any changes in tenure types that arise in the future. That is not helpful or necessary. It is right that the levy regulations should provide future-proofing and regulatory flexibility.

Amendment 154 deals with exemptions for sites that are 100% affordable housing. Subsection (5)(h) of proposed new section 204D of the Planning Act 2008, in schedule 11 of this Bill, already contains a power for levy regulations to make provision about exemptions from or reductions in levy liability. The levy will be used to secure contributions towards affordable housing. We do not expect to charge the levy on exclusively affordable housing developments; we will explore that matter further in consultation. However, all development will be required to deliver the infrastructure that is integral to the functioning of the site, and we will retain the use of planning conditions and restricted use of section 106 agreements to secure that.

Amendment 155 would require infrastructure levy rates to be set at a level that enables an authority to meet the affordable housing need specified in a local development plan. The total value that can be captured by the levy, or indeed any system of developer contributions, will not necessarily match the costs of meeting the entire affordable housing need of an area as specified in the local development plan. Revenues will depend on the amount and types of development that come forward, and when they come forward, as much as on the levy rates and thresholds set. That said, the Bill recognises the importance of using the levy to deliver affordable housing. Proposed new section 204G of the Planning Act 2008, in schedule 11, provides that charging authorities must, when setting their rates, have regard to the desirability of ensuring that affordable housing funding from developer contributions equals or exceeds present levels. That will ensure that affordable housing need is accounted for when levy rates are set; to ensure that, those rates will be subject to public examination.

Importantly, the Bill makes provision for rates to be set with regard to increases in land value—for instance, as a result of planning permission. Targeted increases in rates will allow charging authorities to maximise the revenue that they can capture, and the amount of affordable housing that they can deliver.

We have designed the levy so that it can deliver at least as much affordable housing as the current system, if not more. As I have explained, the new right to require will require affordable housing to be provided. That will be introduced through regulations. That means that local authorities will get the final say on the proportion of levy contributions that go towards affordable homes. Should the levy generate more revenue than at present, local authorities could choose to direct those additional revenues towards meeting their additional affordable housing needs.

[Rachael Maskell]

How are local authorities making calculations about the loss of affordable housing? Clearly, if we just look at new developments, we could say, “There is this growth in affordable housing”, but if authorities are losing stock, the proportion of affordable housing in a community is decreasing. How will that be addressed? If the local plan is just about future developments, should there not be some adjustment for the loss in existing stock? I am talking about not just social stock, but ownership stock.

[Mr Jones]

I thank the hon. Member for that point. Like many other areas, York’s housing market is affected by the tourist industry that the city attracts. It is for local areas—I am glad that the hon. Member’s area is forming a local plan—to assess the housing need in their local plan; they should take matters such as the amount of affordable housing, and the need in an area, into account when making that plan.

Local authorities will need to balance the objective of providing affordable housing with the levy’s other aspirations. Local authorities will need to use the levy revenues to deliver other critical infrastructure, such as new roads and medical facilities. Local authorities, which know their local areas, are best placed to balance funding for affordable housing with funding for other infrastructure needs.

On amendment 156, proposed new section 204Q, introduced by schedule 11, introduces the requirement for levy charging authorities to prepare an infrastructure delivery strategy, which will outline how a local authority will use the money the levy generates through a strategic spending plan. That will include an outline of how it will use levy revenues to secure affordable housing. It is important that that happens in each area. The charging authority will have regard to that when setting levy rates. The exact detail of the infrastructure delivery strategy and how it should be produced will be determined through regulations. We will consult on matters relating to the infrastructure delivery strategy, and forthcoming secondary legislation and guidance will clarify how to treat affordable housing. All of that will be informed by our commitment to deliver at least as much affordable housing as we do under the current system.

I hope that my explanation gives the hon. Member for Greenwich and Woolwich clear assurances on how the new levy will support the delivery of affordable housing, and therefore I ask him to withdraw the amendment.

--- Later in debate ---

[Mr Jones]

Proposed new section 204F of the Planning Act 2008 makes provision requiring an exemption from paying the levy where the party liable to pay is a charity and where the building or structure will be used for a charitable purpose. “Charitable purpose” here has the meaning in section 2 of the Charities Act 2011. It is something that is “for the public benefit” and is for a specific purpose, such as the prevention or relief of poverty, the advancement of education, health, the arts or sport, or the provision of relief to those in need. That kind of development is entitled to exemption from the levy in its entirety.

Under the current system of section 106 planning obligations, an obligation can constitute a reason to grant planning permission only if it is directly related to the development. For that reason, affordable housing contributions tend to be sought on residential developments. Amendment 158 would substantially extend the range of development required to deliver contributions towards affordable housing, including non-residential charitable development. In general, we oppose the amendment because it is not appropriate for charities providing services for the public benefit to also be required to provide affordable housing. It would be unfortunate if all kinds of charitable development, from drug treatment facilities to village halls, became economically unviable because we required them to fund an element of affordable housing as well.

[Rachael Maskell]

It is becoming clear in the debate that there are charities and charities. Some charities are run by major businesses and make a profit. Say a private school was disposing of a playing field that would then be used for the development of unaffordable housing to provide significant funding. Should that private school be exempt because it has charitable status under the Charities Act? Would that be right, because surely it is acting like any other business?

[Mr Jones]

The hon. Member makes a very good point. A charity that builds something that is not for a charitable purpose would not be subject to an exemption from the levy under proposed new section 204F. For example, feeding into what she said, if a charity were delivering market housing, that would be unlikely to meet the definition of a charitable purpose. If there are specific scenarios where contributions should be sought, the Bill enables us to consider them as part of the development of the levy’s regulations. More broadly, we will consult on the types of exemptions that should apply to the levy prior to laying the regulations before the Commons for approval. For those reasons, amendment 158 is not necessary.

[Rachael Maskell]

I want to test another scenario. Say the same educational establishment develops a nursery on that site, but the nursery has a commercial interest. Under the debate that we had about the provision of services, that could be seen as one of the services that could come under the infrastructure levy. A nursery could be a profit-making opportunity for said institution, while also providing support for children under the Government’s funding for nurseries. Would that be included or excluded from the scheme that the Minister is outlining?

[Mr Jones]

I thank the hon. Member for that question. I will not get drawn into lots of different examples, but we are very clear that we are talking about charitable purposes under the definition in the 2011 Act.

Turning to amendments 159 and 160, there may be other instances where an institution is established for charitable purposes but does not meet the definition of a charity—for example, a charity established in Scotland, Northern Ireland or overseas. Amendments 159 and 160 would remove the express ability for regulations to set exemptions or reductions in the levy for these types of institutions. This would mean that only English and Welsh charities could be exempt from the levy when delivering development for charitable purposes. While we recognise that this will be less common, it would still be unfortunate if other types of charitable institutions could not deliver important facilities because of increased costs from the levy.

We are aware that different charitable institutions may operate differently from English and Welsh charities. That is why it is important to maintain a separate power to prescribe in regulations in detail the levy liabilities of such institutions. That enables provision to be made in the regulations, which will keep up with future changes that might be made to charities law. There will also be instances where a charitable institution carries out development that itself is not for charitable purposes but that it should none the less be able to claim an exemption or reduction for.

In the current CIL system, the CIL regulations make use of this power to provide for relief from CIL liability at the discretion of the local authority for developments carried out by charities for investment purposes. This approach works, which is why we do not agree with amendments 159 and 160, which would remove the express ability to set this kind of exemption or reduction through regulations in the future.

I hope that I have provided helpful clarification to the hon. Member for Greenwich and Woolwich and other members of the Committee. I therefore kindly ask the hon. Member to withdraw his amendment.

[Matthew Pennycook]

I am partly reassured by what the Minister said, not least because he clearly indicated that the Government are going to go away and give further consideration to designing regulations. However, I urge him—or his successor when he is promoted—to really look into this issue, because I think there is a chance here, as Members have commented on, for a loophole to be exploited in ways that would cut across the purposes of the Bill as per the Government’s thinking. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 167, in schedule 11, page 287, line 28, at end insert—

“204FA Social enterprises and community interest companies

(1) IL regulations must provide for an exemption from liability to pay IL in respect of a development where—

(a) the person who would otherwise be liable to pay IL in respect of the development is a social enterprise or a community interest company, and

(b) the building or structure in respect of which IL liability would otherwise arise is to be used wholly or mainly for the purposes of social enterprise or the community interest.

(2) IL regulations may—

(a) provide for an exemption from liability to pay IL where the person who would otherwise be liable to pay IL in respect of the development is a social enterprise or a community interest company;

(b) require charging authorities to make arrangements for an exemption from, or reduction in, liability to pay IL where the person who would otherwise be liable to pay IL in respect of the development is a social enterprise or a community interest company.

(3) Regulations under subsection (1) or (2) may provide that an exemption or reduction does not apply if specified conditions are satisfied.”

This amendment makes equivalent provisions about the Infrastructure Levy for social enterprise or community interest companies as it does for charities under inserted section 204F.

The reason for the amendment is that there are different forms of businesses across communities. At this point, I should declare an interest as a Member of the Co-operative party. Social business is really important across our communities. Social businesses, enterprises and community interest companies have a different focus from the run-of-the-mill business. They are not there for profit. They are there to reinvest in their service users and facilities and to give back to their communities.

I think there is a real anomaly in the legislation. Today, the voluntary, community and social enterprise sector is referred to as one, recognising the charitable aims and social aims that these organisations bring. In moving the amendment, I am looking for parity, to recognise the fact that not-for-profit organisations—community interest companies and social enterprises—make an investment in their communities. They can make an investment by employing people from a place of disadvantage and by giving people opportunities in life. However, they are businesses as well, running cafés, for instance. Obviously they reinvest the proceeds they make into people in the community or they perhaps run a nursery or another form of business. We have seen the real benefit that that brings—it certainly addresses the levelling-up agenda. It enables people to move forward in their social mobility journey.

These organisations often start out with no assets whatever. They are very small. They build, reinvest and grow, which is good for the local economy. We need only to look at Preston as an example. It has invested—I look at the Chair, who is the MP for Preston—in the community. It has invested in the model of social business as well, and we know the importance of that. We want to see that rolled out across our communities. If these organisations grow and want to invest more and further benefit the community, but they then have to pay the infrastructure levy, that will curtail the opportunities that they can bring to our communities, and we do not want to see that. We want to see community interest companies, co-operatives and social businesses grow in a way that allows them to reinvest in our communities.

One thing that I have found most inspiring over the last few weeks is meeting organisations that are putting incubators for social enterprises in their communities—again, with no asset, but they provide an opportunity to bring forward a generation of new community interest companies and social enterprises. I have seen a little bit of that on the SPARK site in York, which really has put a spark into York. It is built out of old containers on a site and has brought a new energy into the city centre. It has been a fantastic opportunity, running and helping businesses to develop the ethos of community interest companies as they move forward.

I do not understand why in the legislation credible social businesses, social enterprises and community interest companies do not have exemptions when they give so much back to our communities and bring real transformation to our society. I want the amendment to be made. It is an omission; perhaps the Minister will explain why such an omission was made. Will he also reflect on the charities when it comes to the consultation and looking at further regulations? Will he include social enterprises and community interest companies in the substantive next phase of the legislation?

[Mr Jones]

As I said under amendment 158, proposed new section 204F of the Planning Act 2008 allows for certain charities carrying out development for charitable purposes to be exempt from the levy. Proposed new section 204D(5)(h) also provides powers to exempt or reduce levy liabilities through regulations. This would allow us to set national exemptions or reductions where it is appropriate for other types of development by other types of organisations. When considering the approach to exemptions and reductions, we will need to consider a wide range of development types, including those put forward by the amendment. There is an important balance to strike. Although we will explore national exemptions and reductions to the levy, we want local authorities to be able to make their own decisions about how they might want levy exemptions to apply.

[Rachael Maskell]

I am grateful to the Minister for making that point. Obviously, if local authorities are going to make such determinations, they will have to look for the maximum opportunity. As the legislation is unamended, they will also seek to subsidise the affordability of housing as well. It is very unlikely that a local authority will then look for wider exemptions from the infrastructure levy, so I cannot see how that would work in practice to deliver the objective to which the Minister refers.

[Mr Jones]

I was just bringing it to the hon. Member’s attention that there is a balance to strike in these matters. Clearly national exemptions are an important part of this, but we want to give a certain amount of local flexibility. Our forthcoming consultation on the infrastructure levy will explore this question further. It will allow us to look at the case for exemptions in the round, and decide what types of developments should not be subject to the charge, or should be subject to a reduced charge. Following consultation we will set out in regulations where a charge to the levy will not apply. Those regulations will be subject to debate in Committee and approval in the House. On that basis, I do not consider the amendment necessary and kindly ask her to withdraw it.

[Rachael Maskell]

I have been reassured by the Minister that this will form part of the wider consultation process in the next stage. We will look at that with interest. Clearly, we will want to follow this through in later stages, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Greg Smith (Buckingham) (Con)]

I beg to move amendment 58, in schedule 11, page 287, line 33, at end insert—

“(1A) A charging schedule may—

(a) require a developer to pay their full IL liability for a development before being permitted to commence work on that development,

(b) require infrastructure funded by IL associated with a development to be built before work on that development may commence.”

This amendment would enable Infrastructure Levy charging authorities to require a developer to pay their full IL liability, or for infrastructure funded by IL associated with a development to be built, before development may commence.

--- Later in debate ---

[Tim Farron]

Amendment 58 is really interesting, and probes the Government on an issue that I am also concerned about. The hon. Member for Buckingham set out the case well and I also very much hear the challenges and counterpoints from the hon. Member for Greenwich and Woolwich.

We can all point to developments in our communities where we have seen new housing created without adequate infrastructure being provided. Often, we are talking about utilities such as sewage and draining, and the additional pressure put on those services that they cannot meet. There is clearly huge merit in what is being suggested, because it locks the developer in. I referred earlier to the Church Bank Gardens development in Burton-in-Kendal, where the homes are built and the infrastructure is still not there. The footpaths are not put right. Much of the infrastructure has not been done at all. The road has not been put right. There is often a lack of trust—a sense that the developer will seek to get the benefit of a development without providing the services that were surely part and parcel of the conditions of developing it. The hon. Member for Buckingham is right to press the point, and I hope the Government will take it seriously.

It is important to bear in mind what we are talking about when we think about infrastructure. Several people, me included, have cited GP surgeries, for example, as part of the infrastructure that we would want to have underpinned. I want to be very careful that we do not allow integrated care boards, as they are now, and the Government as a whole to skimp on the provision of GP surgeries, particularly in existing communities, and assume that somehow developers will pick up the tab for them. As we struggle to keep our surgeries in Ambleside and Hawkshead, the issue is not developers not paying the infrastructure levy. The issue is shocking Government cuts in the funding of GP surgeries and complete inflexibility from the new integrated care boards, so let us be careful, when we talk about supporting infrastructure, which we must, and about getting it in place before new developments, that we do not lift or shift responsibility away from our NHS managers and from the Department of Health and Social Care and other Departments.

[Rachael Maskell]

I rise to make a brief point. It is more about the scope of what we have discussed—the infrastructure levy being able to contribute to affordable housing and social housing within a development. One of my fears is that everything is left to the end; it is left to the end to calculate everything, and we end up with what has happened at St Peters Quarter, in York, with the high-value housing—beautiful, spacious housing—in one area and then the section 106 housing in the corner, where there is no proper infrastructure to support it because there is no money left. We therefore get real segregated communities.

I go back to the report that John Hills wrote in 2007. I was at a meeting with him, discussing the report, and he was talking about the importance of place making and mixed communities. We could be in danger of ending up with more divided communities if everything is paid at the end. Therefore scheduling payment is really important. Developers know that that money will have to be paid, and we should ensure that it can be paid in a timely way so that we do not end up with the scenario that we have articulated so much with either the section 106 provision coming never or the infrastructure levy money not delivering on the expectation at the start of the planning process. That could of course occur, but, even worse, we could end up with really divided and segregated communities when we know that the strength and resilience of communities comes where we see that housing jumbled up.

A good example would be Derwenthorpe, in York, where it is not possible to tell what is a social house, what is a privately owned home or where there is equity sharing or anything else, because the houses are all the same and people live in a very mixed and diverse community. That has built strong resilience in the community.

We need to think about more than just housing; we need to think of place making, which I know is Homes England’s real objective. Of course, by holding everything back to the very last minute, we are in danger of not having that. Properly scheduling payment of the infrastructure levy will ensure that we get the proper places that people want to live in and that we build resilience across all communities, as opposed to dividing communities and then developing areas that will create social challenges in the future.

[Mr Jones]

I thank my hon. Friend the Member for Buckingham for his contribution to the debate on the levy today. Even though it is an inviting proposition, I do not think it would be wise for me to start to try to pre-empt the policy of the new Government, but what I will do is focus on amendments 58 and 161, which are before us.

Charging the levy on the basis of gross development value, which will be the sales value of the development that is sold, will enable the levy to capture more of the increases in development value that occur over time. That will result in better opportunity to capture more value from development to put towards infrastructure and services. Later payments will also reduce demands initially on developer cash flow, and the returns necessary to make a development worth while, because payments will not be required up front.

Payments may be made later, but we recognise the importance of the infrastructure levy supporting the timely provision of local infrastructure alongside new development, so that homes are supported by the right services. That is why it will be possible for local authorities to borrow against future levy liabilities, so they can forward-fund infrastructure.

We are also introducing infrastructure delivery strategies that will drive local authorities to plan more effectively for the best use of levy revenues. On the majority of sites, levy contributions towards infrastructure will be secured in cash, creating a simpler, streamlined system. Developers will, however, still need to deliver the infrastructure on site that is integral to the use of the site, including access roads and flood risk mitigations.

In addition, as we have debated, on larger, more complex sites, we intend to retain the use of section 106 planning obligations to secure in-kind delivery of infrastructure. Such contributions will be offset against the levy liability and the timing of their delivery can be negotiated.

Nevertheless, we recognise that there are circumstances in which early payment and payment by instalments may well be appropriate. That is why the Bill provides powers to allow for that under proposed new section 204R(2) of the Planning Act 2008, which is in schedule 11.

Levelling-up and Regeneration Bill (Eighteenth sitting)

Rachael Maskell Excerpts

Committee stage
Tuesday 6th September 2022 Public Bill Committees

[Mr Jones]

Clause 103 provides local planning authorities in England with a new power to issue enforcement warning notices. The notice invites a retrospective planning application for a development that does not have permission, but that may be acceptable in planning terms, or may be made acceptable by the imposition of planning conditions. It does this by stating the matters that appear to be a breach of planning control and stating that further enforcement may be taken if a planning application is not received within a specified period. This formalises a process that the majority of local planning authorities already carry out informally. Formalising the process brings certainty, such as by setting out the specified period for an application to be submitted, and it constitutes taking enforcement action, ensuring that the time limits for commencing enforcement action cannot inadvertently expire.

However, the use of enforcement warning notices by local planning authorities will be discretionary. It will not create significant additional resourcing burdens for local planning authorities. We recognise many local authorities have capacity and capability challenges. We will publish guidance to assist local planning authorities in using enforcement warning notices. Although we are not changing fees through the Bill, we intend to consult on proposals to increase planning fees to ensure that local planning authorities are properly resourced to improve their services.

[Rachael Maskell (York Central) (Lab/Co-op)]

The Minister is talking about local planning authorities being properly resourced. In York, we no longer have a chief planner. There are serious deficits in funding in our local authority. As hon. Friends have said, planning is often the first thing to be cut. How will the Minister ensure that they are properly resourced to take on these additional responsibilities?

[Mr Jones]

I thank the hon. Member for York Central for that important point. I have acknowledged that there are capacity and capability challenges. I have also acknowledged that the Government want to go further by allowing local authorities to bring in more income. We have discussed and put the principle out there of doubling fees for retrospective planning applications, which often put often unnecessary additional pressure on local authorities, if people would have put forward their planning applications in the first instance in the proper and usual way.

On new clause 36, effective enforcement action is important to maintain public confidence and trust in the planning system. The package of enforcement measures in the Bill will strengthen the enforcement powers available to local planning authorities. Generally, the provisions make the existing framework easy to use by enforcement officers and, as such, they will not create significant additional burdens or resource pressures for local planning authorities. The use of new tools, such as enforcement warning notices, is discretionary. We are also working with partners to deliver a capacity and capability strategy to support the implementation of our planning reforms so that local planning authorities have the right skills and capabilities to make creative decisions and drive forward ambitious proposals, and we are committed to new burdens principles.

For those reasons, we cannot accept amendment 116 and new clause 36. I hope the hon. Member for Greenwich and Woolwich is sufficiently reassured to withdraw the amendment.

--- Later in debate ---

[Mr Marcus Jones]

I thank the hon. Gentleman for his questions. On clause 105, let me give him an example of an undue delay. Such a delay could constitute not allowing a planning inspector to access land for a site visit. That is one circumstance in which the process would be frustrated.

On clause 106, I gently say to the hon. Gentleman that, while I understand his concerns, many members of the public, particularly those who have been affected by unauthorised developments, would be keen for us to be tougher on such developments. Therefore, I think this is more about ensuring that we put in place a regime that deters people from embarking on unauthorised development. I therefore believe that increasing the fines that will be payable is the right thing to do.

Question put and agreed to.

Clause 104, as amended, accordingly ordered to stand part of the Bill.

Clauses 105 and 106 ordered to stand part of the Bill.

Clause 107

Power to provide relief from enforcement of planning conditions

[Rachael Maskell]

I beg to move amendment 137, in clause 107, page 125, line 35, at end insert—

“(1A) But regulations under this section may not provide for relief from a planning condition relating to the development of a type or volume of affordable housing in a development.”

This amendment would exclude planning conditions relating to the delivery of agreed on-site affordable housing in developments from the power to provide relief from the enforcement of planning conditions.

Where affordable and social housing is identified in plans, the obligation to provide that tenure in the planning process must never be overridden. We have a national crisis with regard to the availability of affordable homes for our constituents. I certainly see that in York, where it is skewing the economy and having a severe impact on the way my community works. We have been overrun by so many second homes and holiday lets that it is even impinging on our ability to deliver statutory services in my community.

Far too often, developers start to build out their plans, starting with the high-value housing, only then to return with the plea that the site is no longer viable to provide social or affordable housing. That housing is therefore not built, and the funding is banked but never spent, because the argument is played out time and again on future sites. High-end, high-value housing is therefore taking precedence over the development of affordable housing. We simply cannot allow that to happen at any point in the development process. My brief amendment would recognise that in statute to ensure that there can never be an excuse for not delivering vital affordable housing on the basis of viability.

[Tim Farron]

This is an important amendment, which by my reading would ensure that communities do not get stitched up as a result of viability assessments. I can think of examples in all three planning jurisdictions in my constituency where a developer has been given planning permission and part of the deal has been the delivery of a portion of affordable housing—often social rented housing. I am thinking in particular of the site at Jack Hill in Allithwaite, near Grange-over-Sands. To put it bluntly, the developer goes on site, turns over the turf, discovers some rocks and says, “Ooh, that’s more than we expected. It’s going to be expensive. We can’t afford to deliver your 20 affordable houses after all.”

The only reason the community, perhaps grudgingly, consented through its representatives to planning permission being given in the first place was the assumption that, of those 50 or 60 houses, perhaps 20 would provide homes for local families and local workers. I remember South Lakeland District Council going to the Secretary of State’s predecessor but two to raise this matter with them, saying, “Come on, this cannot be legitimate. It can’t be right.” The developer agrees, at planning committee, to build these affordable houses and then turns up, discovers something that is not a surprise if someone knows even the rudimentaries of the geology of the lakes and south Cumbria, and decides they are not able to build those houses. I am afraid that the Secretary of State said to our council, “No, we will not stand with you. The developer can do what they want.” As a result, we have got no affordable housing out of that particular project, and many others besides.

We have a massive housing crisis in Cumbria, and a workforce crisis as a consequence. It is heartbreaking and economically debilitating. We have the powers, if they can be enforced, to do something about it. The amendment put before us by the hon. Member for York Central would give us at least some opportunity to force those who have been given planning permission to keep their promises, so that affordable homes are at least in part delivered to the communities that need them.

--- Later in debate ---

[Mr Jones]

I thank the hon. Member for York Central for her amendment. It seeks to ensure that relief from enforcement action under clause 107 cannot be granted with respect to planning conditions relating to affordable housing delivery. The aim of clause 107 is to enable the Secretary of State, by regulations, to limit enforcement action against non-compliance with prescribed planning conditions or limitations for a specified period of relief. Members of the Committee will recall that the covid pandemic demonstrated that the planning system needs to be sufficiently flexible to support businesses to respond to and recover from periods of disruption quickly and confidently.

During recent years we have taken steps, through written ministerial statements, to encourage local planning authorities to take a considered approach to enforcement action against non-compliance with certain planning conditions that have placed unintentional burdens on businesses. That includes conditions that govern the operative uses of development, such as construction working hours, delivery times and opening hours. Clause 107 will place on a statutory footing similar provisions to those that we introduced through policy, and it is intended that the measure will be used in relation to those types of operative use conditions as periods of disruption arise in the future.

The hon. Member’s amendment concerns those conditions that relate to affordable housing specifically. Affordable housing provision is principally secured through a section 106 agreement rather than planning conditions, so the practical benefit of the proposed exemption would be limited and this is not the sort of operative condition that the clause is aimed at. Furthermore, we are proposing to change the way affordable housing for a development is determined, as part of our plans for the new infrastructure levy, which the Committee will debate shortly. Through regulations for the levy, we intend to introduce a new “right to require”, to remove the role of negotiating in determining levels of onsite affordable housing, and we propose to consult on the approach shortly. Therefore, I consider the amendment not to be necessary and I ask the hon. Member for York Central to withdraw it.

[Rachael Maskell]

I thank the Minister for his response. I will certainly be following the debate on schedule 11 very closely, to ensure that it does fulfil all the commitments that the Minister has alluded to in his speech, but I will withdraw the amendment at this point. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

[Mr Jones]

On the basis that I have explained how clause 107 works during our discussion of amendment 137, I do not propose to make any further comments on it. I commend the clause to the Committee.

Question put and agreed to.

Clause 107 accordingly ordered to stand part of the Bill.

Clause 108

Consultation before applying for planning permission

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

--- Later in debate ---

Looking back at the roll-out of CIL—the only comparable process—I would hazard a guess that even with a fair wind we are talking about the levy not being in place across most of England until the early 2030s. Given the risk, uncertainty and disruption that the implementation of the new levy will entail, one is left wondering, quite honestly, why the Government are bothering to legislate for it at all, rather than seeking instead to reform and improve the existing system.

[Rachael Maskell]

My hon. Friend is making an excellent speech about our concerns about the infrastructure levy, but one thing he has not touched on yet is the resourcing required to put it in place. We have just had a debate about the resourcing of local authorities, in which it was recognised that planning departments are under considerable strain. That is likely to get worse in the light of the challenges that local authorities face. How will the resourcing be put in place to deliver even the basics by 2030?

Levelling-up and Regeneration Bill (Seventeenth sitting)

Rachael Maskell Excerpts

Committee Debate: 17th sitting
Tuesday 19th July 2022 Public Bill Committees

[Alex Norris]

I am grateful to the Minister for his response. I am slightly uncomfortable that he relies on the 1990 Act, because that clearly was not sufficient in Liverpool, and there is a real and current risk around Stonehenge. On his point about case law and strong consideration, again that has not always been effective in cases where we might have wanted it to be. We then rely on the courts to test the edge cases; maybe that is inevitable, but we could eradicate some of that with slightly stronger language. At this point, I do not think it is beneficial to labour this any further, because the Minister made a clear statement about his intent, which was welcome. We may wish to return to this at a later stage, but if colleagues are content then I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell (York Central) (Lab/Co-op)]

I beg to move amendment 128, in clause 92, page 97, line 31, after “enhancing” insert “the significance of”.

This amendment adds to the description of the purpose of sensitive management of heritage assets.

It is a pleasure to serve with you in the Chair, Sir Mark. This amendment looks at not just an asset, but the significance of an asset. Preserving or enhancing an asset may not be possible, but preserving its importance and significance could be.

In York, there is much to determine the social history of our city. Of course, assets are often thought about in terms of bricks and architecture, rather than their social significance and the way that has fed into the wider architecture of a place. In York, there is a process that prevents anything from obliterating the view of the Minster, for instance, and thus its significance as a centre and a beacon across not only York, but North Yorkshire. It can be seen from miles away, so the building of flats as is happening currently, or the plans proposed on the site of the gasworks, would remove the significance of that asset. Preserving it is really important. Likewise, the centre for heritage arts that is currently being developed to go to planning is causing concern about the way it could detract from the view of the Minster. Although it is not directly impeding on the material asset, its development could have significance.

Another example many will know of is Bootham Crescent, the former home of York City Football Club. It was built in 1932 and has only just closed. The stands were something to behold. Maintaining the spirit of Bootham is important. It is where many people have laid ashes to rest. There are significant tunnels under the ground, which have important graffiti on them—fans would cross the stadium through them mid-match and fights would break out. Maintaining these assets is about the working-class population of York and the significance of football to them.

York Central—here we go again—was the home of the British Rail carriage works, and has real significance for the blue-collar workers of our city, who made a tremendous contribution to the railways. Yet this could well be wiped out by the York Central development, so none of its significance to the building of the railways over 100 years would remain. Therefore, it is not just about the asset itself and how important it is, but is about the social story that can be told by it. That is why I believe that my amendment is important for looking at how heritage assets are preserved.

--- Later in debate ---

[Rachael Maskell]

I think we will go on to have a further discussion about this matter. Given that the concept is within the NPPF, as the Minister said, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 136, in clause 92, page 98, line 34, at end insert—

[The Chair]

With this it will be convenient to discuss amendment 138, in clause 92, page 98, line 34, at end insert—

[Rachael Maskell]

Romans, Vikings and medieval Britain are often on people’s minds as they visit and walk the walls of our city, yet the social history of York has a far more powerful application to our city’s development. The amendment highlights the importance of that. I think of Bootham Park Hospital, built in 1772, and the history that it made in managing mental health in our country and really advancing mental health treatment; only in 1796 did the Retreat open and improve mental health provision. Those assets have been disposed of to the private sector, which just wants to turn them into commercial outlets. Of course, that does not take on board their significant contribution to mental health in our country, and how it changed the way mental health was dealt with across the world. We are losing the significance of those assets because there is simply not enough protection in law to preserve that amazing history.

I can give other examples—for instance, the Castle Gateway project in York. Clifford’s Tower is very significant to our nation’s history, particularly Jewish history in our country. It is also a site of justice. It is where Lascelles fought Wilberforce to come to this place to fight slavery. A significant debate took place there, yet the Castle Gateway project would turn it into parkland. There would be no reference whatsoever to the significance of that major piece of British history. It is therefore really important that we look at how we can build in such assets, and recognise the incredible fabric of social history.

Amendment 136 is therefore really important, as is amendment 138. I hope that the Government will understand the significance of it too, given the felling of ancient woodlands—bulldozing our cathedrals of nature. Our natural heritage must also be preserved.

--- Later in debate ---

Natural England is also producing new guidance on national park and areas of outstanding natural beauty management plans, with the intention that management plans should set out clear actions, aligned with local management plans and national priorities such as those within the 25-year environment plan, including on beauty, heritage and engagement. For those reasons we do not accept amendments 136 and 138. I hope I have provided sufficient reassurances to the hon. Members for York Central and for Westmorland and Lonsdale to enable them to withdraw their amendments.

[Rachael Maskell]

I listened carefully to the Minister’s response. First, I want to thank the hon. Member for Westmorland and Lonsdale for setting out the implications of his amendment for natural and rural heritage; we can see how that can rapidly disappear into a developer’s dream and a local community’s nightmare. A highland clearance in the modern era is something that we have to take stock of. The protections clearly are not there, in the same way that protections are not there currently under the NPPF, because we are seeing significant sites of social history also having a diminution of their significance through the developments being brought forward. Although the Minister is right to say that there is legislation that can address the issues, there is clearly a mismatch in what happens in practice. As a result, I still have significant concerns.

The Minister talked about the fact that sites of social significance are not currently recognised in the legislative framework, and I will certainly take that back to archaeologists because they would want to see significant change—perhaps even a Bill in its own right—to address that. Because of the way that many developers are currently behaving, I fear we will lose much of our significant past, so we need to find mechanisms to protect us. On the basis of exploring further legislation, I am happy to withdraw my amendment now, but we will return to it. I beg to ask leave to withdraw the amendment.

[Tim Farron]

I am grateful to the Minister for his detailed response to the amendments.

The landscape review does give potential for there to be additional protections for areas of outstanding beauty such as the north Pennines and Arnside and Silverdale in Cumbria and across north Lancashire. It is worth bearing in mind that landscape heritage is lost quickly and subtly and not often as a result of a direct planning proposal. It is not that developers come in and decide to build several hundred properties in Longsleddale; it is that Longsleddale changes because farmers cease to be farmers and the area ceases to be farmed.

We therefore see—moving away from Lonsdale to other parts of the lakes and dales—the dry stone walls crumbling, with the loss of that vital part of our heritage going. We see the barns crumbling. The historic heritage species disappear, and access to the fells and dales disappears as well. The subtle but perceptible feel and aesthetics of those places—not just those that we have grown up with, but that have been the feature of a lived experience over hundreds and hundreds of years—begins to change.

Landscape heritage is lost quickly and subtly, and partly in response to Government action or inaction, whether accidental or deliberate. We have a food strategy, or an approach to farm funding, that is almost deliberately written to reduce the amount of food that we produce in this country. As a result, it will be a less-farmed environment, and it will look different. Given that the tourism economy of the Lake district, Yorkshire dales and Cumbria is worth £3.5 billion a year, that will have a huge impact monetarily and economically, as well as aesthetically.

I am happy not to press my amendment to a vote. We will keep a close eye on what the Government intend in terms of safeguards for our landscape heritage and culture, and we will wait to see whether greater protections are provided as the Bill progresses.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Tim Farron]

This short placeholder clause has all the hallmarks of a post-it note stuck on the A board by the boss on an away day that nobody had the courage to say was silly. The boss has gone now, so we could just take it off the whiteboard. The Government are trying to think about democracy and involving people in a hyper-local way in planning. Let us be generous and say that that is commendable. I will not vote against the clause either, but to have a placeholder clause, with a total absence of detail, seems very peculiar. The Conservative-led Local Government Association talks of its fears about the risk of

“stifling the production and implementation of local plans.”

That will need to be answered very clearly in any further work on the clause.

There needs to be some clarity on the specific requirements that will need to be met in order for a street to vote in favour of or against a proposal. If we are to go ahead with this, surely it is right to do some learning via a pilot process before we roll it out everywhere. Not only do I understand but I am ahead of the Government when it comes to desiring to involve local people in a genuine democratic way. Other members of the Committee are as well. We have given the Government, through the Committee, opportunities to do just that. The hon. Member for York Central tabled amendments on a deliberative planning process, and this morning I sought to give the Government the opportunity to give communities power over their own housing stock, to ensure that they preserved an appropriate amount for permanent dwellings. Those were rejected, but we will have a referendum on Terry and June’s new garage.

As the hon. Member for Greenwich and Woolwich indicated, we are all seriously in favour of local democracy, but I am concerned that the proposal will potentially be very divisive, and that we have not thought it through. We reject genuine local control and go for this instead. It feels like a triumph of the trivial over the useful. There are other questions that we could ask. How do we define a street? Does the 6-mile-long Kentmere valley count as a street? If we were serious about this, we would not have a post-it note on the whiteboard. Either fill it in or take it off, but I am sceptical.

[Rachael Maskell]

I will add my scepticism to the comments that have already been made. I have so many questions about the clause. When a clause throws up the number of questions that this one does, the Government should withdraw it. I understand that they want to involve communities, but there are many ways of doing that far more comprehensively. I do not know whether the Minister’s constituency is like mine, but people are saying that they want involvement and consultation; they are certainly not hammering at my door in order to have a referendum, vote or whatever we want to call it over a particular commodity. They want good planning put in place.

We have been discussing the opportunity for people to have a real voice in things, as in the situation that we have, with whole swathes of my city bought up by people trying to turn it over to Airbnbs. If they buy a number of properties on a street and have a monopoly on that street, could they push through developments? That would mean they are exploiting the opportunity being set out by the Minister in the legislation. Indeed, people in the surrounding area would have no say whatever. That is open to abuse without tighter controls in the legislation.

This measure is a way of democracy-washing the Bill: we are taking away significant powers through the national proposal from the Minister, under which the Secretary of State could impose planning decisions on communities, but then saying, “By the way, you can have a vote on an extension on your street.” That democracy-washing approach does not wash with those on the Labour Benches. We want something more enduring that involves more debate, listening and engagement to get an outcome that is right for communities. The Minister must answer these questions.

This feels very much like the Minister is saying, “Children, you can vote on something on your street, while we grown-ups get on with the big development plans.” It is those plans that will affect whole swathes of the community, perhaps through national development management strategies taking over the big decisions, while people can only vote on an extension—or not—on their street.

We need to think about the context in which we want communities involved in planning—which we absolutely do—and decisions made. But this democracy-washing simply does not wash with me or my Labour colleagues.

[The Chair]

I call the Minister to respond on Terry and June’s new garage.

--- Later in debate ---

[Matthew Pennycook]

As the Minister outlined, clause 97 of the Bill inserts new sections into the Town and Country Planning Act 1990 to provide for two new routes to apply for planning permission in respect of the development of Crown land in England—that is, land in which there is a Crown or Duchy interest. In the case of either route, the provisions in the clause will allow the appropriate authorities to apply for planning permission direct to the Secretary of State, rather than being subject to the same requirements and the same application processes as any other person undertaking development.

In such circumstances, the Secretary of State must notify the local planning authority whether or not they intend to decide the application. If they opt to determine it themselves, they can approve it conditionally or unconditionally or refuse it. They have to consult the local planning authority to which the application would otherwise have been made, but the authority would have no right to veto it.

The policy paper accompanying the Bill portrays the clause as a means simply to

“provide a faster and more effective route for urgent and nationally important Crown development”,

but we are concerned that, in practice, its effect is likely to be far less benign. Specifically, we are concerned about the implications of introducing such an open-ended measure, in terms of both removing appropriate and necessary limits on the exercise of Executive power and denying communities a chance to express views about development in their area and to signal their consent or opposition.

We appreciate fully that there are emergency situations where it is necessary to expedite the planning application process to facilitate essential development, and the construction of the seven Nightingale hospitals during the pandemic to provide critical and step-down care for patients is probably the best recent example—the process exists by which they could come forward, and they did. However, the broad scope of the provisions in the clause, which do not provide for any limit on the type of development that can be approved directly by the Secretary of State or in what circumstances, means that it could be used for a much wider range of proposals.

Let us take the system of large-scale accommodation centres that the Government have announced they intend to establish to house people seeking asylum while they await a decision on their claim. The system includes the “new, bespoke, reception centre” the Government plan to open on an ex-RAF base in Linton-on-Ouse in North Yorkshire for up to 1,500 people—a development that the hon. Member for Thirsk and Malton (Kevin Hollinrake) has raised serious concerns about on a number of occasions.

The Committee will know that the Government have variously opened, or signalled their intention to open, centres accommodating—I use the term “accommodating” very loosely—asylum seekers in Penally in Pembrokeshire, Napier in Folkestone, Barton Stacey in Hampshire and in the shadow of Yarl’s Wood in Bedfordshire. All the sites were either on, or proposed for construction on, Crown land. All have been subject to controversy and, in the case of Penally and Napier, legal challenge—not least because of the lack of consultation with local communities in the areas where they have been, or were proposed to be, situated.

[Rachael Maskell]

I have very much been involved with the community around Linton-on-Ouse. The fact that there has not been any proper consultation on transportation issues or on the impact on the local community has caused real concern that the Government will just press ahead with these developments without considering those issues. Does my hon. Friend agree that a more thorough, thoughtful process needs to be put in place? Also, should we really be offering refugees this type of accommodation? They are clearly in a desperate situation and need community to be wrapped around them, not to be isolated away from people and services.

[Matthew Pennycook]

My hon. Friend gets to the heart of the matter. Our concern is that the powers provided for by the clause will facilitate precisely what she suggests: the driving through of centres such as the one in Linton-on-Ouse, regardless of their impact on the people placed in them or the local communities in which they are situated.

My understanding—the Minister is welcome to correct me—is that in establishing Penally and Napier, the Government sought to rely on schedule 2 to the Town and Country Planning (General Permitted Development) (England) Order 2015, which relates to permitted development rights. In the case of Napier, the Home Secretary granted herself permission to extend the life of the facility for a further five years, without any public consultation, by using a special development order provided for by delegated legislation. In a judgment handed down on 24 June 2022, the High Court ruled that decision unlawful.

Why have I explained that history at length? Because it is difficult to be aware of that history and not assume that the powers in clause 97 are being introduced to provide a more definitive way of securing planning consent for development on Crown land, such as for asylum centres, irrespective of the harm that such centres might cause for those placed in them, or their impact on local communities, who under the clause will be denied any right to influence a decision taken by the Secretary of State without public consultation.

I listened carefully to the Minister, who was quite clear that the powers will be used only in “moments of crisis” and in “exceptional circumstances” when there is a clear and urgent need to do so in the wider public interest. The Minister can correct me, but I see nothing in the Bill defining “exceptional circumstances”, “issues of national importance” or a “clear and urgent need”. Labour feels strongly that it is essential to insert appropriate safeguards into the clause to ensure that there are limits to the use of these powers and that minimum requirements are in place to secure some measure of consent from affected local communities. Without a firm commitment that such safeguards will be introduced at a later stage, we believe that the clause needs to be removed from the Bill. I look forward to the Minister’s response.

Levelling-up and Regeneration Bill (Sixteenth sitting)

Rachael Maskell Excerpts

Committee stage
Tuesday 19th July 2022 Public Bill Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I will be relatively brief, both because we have discussed these issues extensively in Committee and because the hon. Member for Westmorland and Lonsdale made the case so comprehensively, speaking about the communities in his constituency and the lives and livelihoods of those who make up the communities.

As I have said before, one need only speak to any hon. Member with acute housing pressures of the kind the hon. Gentleman set out to realise that the Government have not got the balance right between the benefits of second homes and short-term holiday lets to local economies and the impact of excessive concentrations of them on local people. It has also become apparent over the course of previous debates that there is a divide between those on the Opposition side and those on the Government side when it comes to how urgently and how boldly we must act to address the problems of excessive second home ownership and its staggering growth. The hon. Gentleman gave truly staggering figures of short-term holiday lets, showing the problems they cause around the country.

The Opposition are clear that we need urgent action in a range of areas to quickly bear down on this serious problem. There is no doubt in my mind that the introduction of new planning use classes could—along with a suite of other measures, because more measures would be needed—go a long way to restoring the balance that we all agree must be struck, giving communities back a measure of control that they do not currently enjoy. For that reason, we wholeheartedly support the amendments and urge the Government to give them serious consideration.

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I want to add my support to these amendments. The issue seems to be that holiday destinations in particular have been hit by the Airbnb market. I am sure the hon. Member for Westmorland and Lonsdale will be hearing from many of his colleagues about the implications it has, whether they are from Cornwall or Devon, and it is now spreading across the country.

York has been hit, in particular over the pandemic. We have seen a 45% increase in Airbnbs over that period, and it is hitting our communities hard. According to today’s figures, there are 2,068 Airbnbs in my community. We are seeing an extraction economy, where money is being taken out of our local economy predominantly by people from London and the south-east, who can afford to buy these additional properties. They are clearly trying to make a profit, but it comes at the expense of our communities.

We have heard about the impact on public services and the local economy. Hospitality venues are now not able to open full-time for the guest economy, because they cannot recruit the necessary skills. It is skewing the whole economy and our public services, in particular care work, and that is now orientating into our NHS. It is jacking up the house prices in the area, and we are getting this heated housing market because demand is so great. We hear about people coming and buying six, seven or eight of these properties at one go.

The result of this increased demand is that local people are impacted. They are faithfully saving for their mortgage, but when they go to put an offer on a house, someone undercuts them by tens of thousands of pounds, because they know that they will get the return. Renting a property in York costs, on average, £945 a month. An Airbnb stay over a weekend costs £700. That is why we are seeing this massive reorientation. Section 21 notices are being issued to people in the private rented sector to move them on to make way for Airbnbs.

The undercutting of prices is also impacting on the regulated B&B and guesthouse market, and because Airbnb and second homes are not regulated, the health and safety is not there, and there are so many other checks that are not in place. A registration scheme, which I know the Department for Digital, Culture, Media and Sport is consulting on, is completely insufficient for addressing the challenge. It is a new challenge, and the Bill provides the Government with the opportunity to right the wrongs of what is happening and at the scale it is happening.

Creating these new classes would bring opportunity, but revenue can also be drawn from them. Many of the properties in question are classified under small business rates, so their owners do not pay council tax, but because they reach the threshold for small business rate relief, local authorities such as York are missing out on millions of pounds in revenue that they could get from such properties. It is therefore really important to categorise the properties and then look at how we use the categories.

I mentioned that in York we have 2,068 properties listed as Airbnbs; two weeks ago there were 1,999, so the number of properties that are going out to this new market is going up week by week. That is having a significant impact on York and York’s communities, so I trust that the Minister will not only support the amendment but engage in a wider discussion about what is happening to our communities, particularly in holiday destinations, so that we can ensure that, through this legislation, there is a suite of policies to ameliorate that market.

[The Minister of State, Department for Levelling Up, Housing and Communities (Mr Marcus Jones)]

It is a pleasure to serve under your chairmanship, Mr Paisley. The amendment and new clauses raise an issue on which the Committee touched when we discussed our proposal for a second homes council tax premium. As was said in that debate, we recognise the impact that a large and growing concentration of second homes and short-term holiday lets can have on communities.

The hon. Member for Westmorland and Lonsdale is charmingly persistent on this matter, not just for his own constituency, and I have some sympathy with his case. We know that in areas such as the Lake district, Cornwall, Devon and the Isle of Wight there are concerns about the impact of second homes and short-term holiday letting on the availability and affordability of homes for local people. I also know that the proliferation of short-term lets has affected our cities—we have heard the hon. Member for York Central talk about that, and I am aware that it is also an issue in Bath and London—which is why we are listening to local communities about the measures that they think will help to address the issues in their area.

Neighbourhood planning is an important tool in this context and, as I am sure we will discuss further, the Government wish to strengthen it. However, neighbourhood plans can already set policies concerning the sale and use of new properties in their area, including by limiting the sale of new homes for second homes and holiday lets. An example of this is in St Ives, where the neighbourhood plan, approved by local people, introduced a principal residence policy to prohibit the sale of new homes as second homes. Although the policy was challenged in the High Court, the court found in favour of St Ives and its policy. As such, I hope that the hon. Member for Westmorland and Lonsdale will agree that the changes he seeks to make with amendment 119 are already built into the neighbourhood planning system.

[Rachael Maskell]

I want to highlight the fact that the issue is not just with new properties; it is predominantly existing properties that are brought forward. To put such a policy into the planning process, as the Minister proposes, will address only part of the problem— the future problem—and certainly will not stop the market because it will orientate completely to the existing housing stock.

--- Later in debate ---

[Matthew Pennycook]

I thank the hon. Member for Westmorland and Lonsdale for tabling these amendments, the intention behind which we very much sympathise with. We know that excessive rates of second home ownership in rural and coastal areas are having a direct impact on the affordability, and therefore availability, of local homes, particularly for local first-time buyers. Correspondingly, we know that the marked growth in short-term and holiday lets in such areas is having a direct impact on the affordability and availability of homes for local people not just to buy but, as he said in relation to the previous group of amendments, to rent.

Research from CPRE, the countryside charity, makes it clear that our rural housing supply is disappearing and social housing waiting lists in rural areas are lengthening year on year. I agree with the hon. Gentleman that it is crucial that more is done to ensure that national parks and areas of outstanding natural beauty have not just more affordable homes but—I make the distinction—more genuinely affordable homes.

If I am honest, however, I am concerned about the implications of the blanket nature of the restrictions provided for by these proposals. Although there is no doubt in my mind that the provision of genuinely affordable homes to buy and rent must be the priority in such areas, I worry slightly about the potential for unintended consequences, such as ruling out the provision of housing for general demand, which might be needed in some parts of the country to sustain the life of communities.

That said, I appreciate that these proposals are premised on giving communities discretion as to whether they use these powers, and I recognise and support the point that the hon. Gentleman is making with them. I hope the Government respond constructively.

[Rachael Maskell]

I, too, am sympathetic to these proposals, but I want to point out an area of unforeseen consequence. My constituency is not an area of outstanding natural beauty—although I would argue that it is—or a national park, but we sit just beneath the Howardian hills, and the dales and moors are not far away. If these blanket proposals and bans are orientated to those areas, the challenge is that they could heat up the Airbnb market even faster, particularly in somewhere such as York.

On the application process for a world heritage site, it would seem sensible for a world heritage site to be included in the criteria. I would compare the measure with a residential parking scheme: as we know, if we restrict parking on one street, people tend to park on the next street along, and we just build out and out. That may happen if we do not give flexibilities and opportunities to all areas.

Although I am really sympathetic to the sentiment behind these proposals and to the powers they would give, the scope should be broadened to enable all authorities to have the opportunity to control the housing and the lease of housing within their governance.

--- Later in debate ---

[Tim Farron]

Just to be clear, the wording of the amendment means that it would enable national parks to do these things, and they can choose not to if they wish. If we are about respecting local communities, then what we do is about giving people power, not telling them what they must or must not do. For the Government to not support what I am proposing is effectively removing that choice from them.

I hear what people say about the impact on neighbouring communities. It is worth bearing in mind that national parks are—rightly or wrongly—made up of people from a whole range of different backgrounds. The people who are placed on national parks include those appointed by a Secretary of State, people from parish councils within the national park, and the principal authorities that make up that national park, which also cover areas that are not in the national park. At the moment, most of the area that Cumbria County Council covers is not a national park. It includes larger towns and, indeed, one city within Cumbria, which are not in the national park. Likewise, the district councils also have representatives, and not one of those district councils is majority national park in terms of population, so there is that understanding of the impact beyond the boundaries of a national park.

I understand what the Minister says about the importance of the revenue raised by market housing, but the evidence we see with our own eyes in communities like mine is that when communities can bank on new developments being affordable, we suddenly see a huge reduction in build costs, because landowners will give up land for significantly less than they would have done otherwise. Build costs reduce, and the whole community tries to find ways to achieve things. It is very similar to what has happened in my area with rural broadband—communities can deliver broadband much more cheaply than BT because, as it turns out, landowners are quite happy to allow a bunch of people to dig trenches as part of a community effort. People will do that for nothing, whereas they would not do that for a commercial enterprise. So that does not undermine the case at all.

The evidence I have brought before the Committee—the Rural Services Network stating and showing evidence that, on the Government’s own metrics, rural England is more in need of levelling up than any of the geographical regions of England, even the poorest of them—tells us that we have to do something to tackle the need. This amendment is one way in which that could be done. I understand, however, and was interested in, some of the things that the Minister said, so I will not press it to a vote at the moment. I would love to see further action from the Government to address the issue in the coming weeks. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 131, in clause 88, page 94, line 27, at end insert—

“(ab) policies (however expressed) that can require that some or all housing development sites within the neighbourhood plan area are used exclusively for the delivery of affordable housing, as determined in the neighbourhood plan;”.

This amendment would specifically provide for neighbourhood development plans to specify that housing development must deliver affordable housing.

[The Chair]

With this it will be convenient to discuss new clause 41—Local authorities to be permitted to require that new housing is affordable—

“(1) Notwithstanding the National Planning Policy Framework, a local planning authority may mandate that any new housing in its area is affordable.

(2) A local planning authority may define ‘affordable’ for the purposes of subsection (1).”

This new clause would enable local authorities to mandate that new housing under their jurisdiction is affordable, and to define “affordable” for that purpose.

[Rachael Maskell]

I will be brief, Mr Paisley. We have just been talking about affordability, and I am sure that the Minister is listening carefully to our considerations and the different challenges we face across our communities. It is so important to be able to develop good, sustainable communities in the future. The amendment simply seeks to take that to the next level and enable neighbourhood planning processes to ensure that 100% affordability is built in to include social development, which is so important to building sustainable communities. We clearly do not see that at the moment. My amendment therefore speaks for itself.

New clause 41 would get there by a different route, so I am supportive of it, because I am trying to find a solution to the issue of affordability, which so many of our constituencies struggle with at the moment. I will say no more on that, but I trust that the Minister has heard and will respond appropriately.

[Mr Jones]

I understand that the hon. Member wants to see more affordable housing delivered, but I do not agree that the amendment is necessary to achieve that objective. The Government remain committed to neighbourhood planning, and the reforms in the Bill will ensure that neighbourhood plans continue to play an important role in the reformed planning system.

The clause sets out what communities can address in their neighbourhood development plans. It already allows communities to include policies on the provision of affordable housing in their area, taking into account local circumstances. New clause 41 seeks to enable local authorities to mandate that new housing under their jurisdiction is affordable, and to define “affordable” for that purpose. I entirely understand the desire for more affordable housing, but the approach that is advocated through the new clause would be somewhat counter-productive.

Local authorities are already empowered to set policies in their local plans that require developers to deliver a defined amount of affordable housing on market housing sites, unless exceptions apply. Such policies are able to take into account local circumstances in setting the appropriate minimum amount of affordable housing to be delivered, which will vary across the country. Under the infrastructure levy, we will introduce a new right to require in regulations, through which local authorities can require a certain proportion of the levy to be delivered as on-site affordable housing.

The revenue from market housing is, as I said, vital to delivering affordable housing, and we have already provided 24,000 affordable homes through developer contributions during 2021. In addition, the new infrastructure levy will help to deliver more on-site affordable housing than at present. I hope that, with those reassurances, the hon. Member will withdraw the amendment.

[Rachael Maskell]

I listened intently to what the Minister said. It does not fully satisfy me or answer the inquiry that I am making in the amendment, because he simplifies the ability to achieve the objective, which we know is not happening at the moment with the provisions that are in place.

I will withdraw my amendment today. However, I trust that we can perhaps look at this matter at a later stage of the Bill, in order to achieve the objective I am seeking. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 132, in clause 88, page 95, line 4, at end insert—

“(e) in areas of historical, cultural or environmental sensitivity, requirements intended to ensure that development is in keeping with the proximal environment.”

This amendment would enable neighbourhood plans to require that development in areas of historical, cultural or environmental sensitivity is in keeping with the surrounding environment.

I will again be brief, because my amendment is self-explanatory. In an area such as York, the development of part of the city can impact on the whole city. As I have previously mentioned, we are in an application at the moment for the tentative list of world heritage sites. Therefore, we want to ensure that the space in our city is built sensitively to best reflect our environment. That does not mean that it has to be identikit, just that we need to look at how we can build something that respects the historical, cultural and environmental sensitivities of an area such as York. We have a lot of development happening in York and many plans coming forward simply do not fulfil those criteria. I have spoken to Historic England and to archaeologists in the city, and they have deep concerns about the effect that new build could have, including detracting from our city’s incredible assets.

The amendment would also apply to the natural environment, ensuring that blend is built in with that. It does not mean that something new and vibrant cannot be developed, but it means that the sensitivities are considered. As a city, we are certainly interested, as I am sure many other places are, in how we can ensure that developers build according not just to their own desire, but to address the local sensitivities of an area.

[Mr Jones]

I thank the hon. Member for York Central for tabling the amendment. I understand that she wants to ensure that communities can protect their cherished local environments from harmful development. However, I do not agree that the amendment is necessary.

Under clause 88, communities will already be able to include policies that place requirements on new development to prevent it from harming sensitive areas. Furthermore, throughout the Bill we are already introducing measures to strengthen protections for our historic and natural environments, such as extending the protections for certain designated heritage sites, including a power to issue temporary stop notices, and moving to an outcomes-based approach in environmental assessment. On that basis, I hope that the hon. Member will withdraw her amendment.

[Rachael Maskell]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 133, in clause 88, page 95, line 9, after “contribute” insert

“to the mitigation of flooding and drought and”.

This amendment would require neighbourhood development plans to be designed to secure that the development and use of land in the neighbourhood area contribute to flood and drought mitigation.

[The Chair]

With this, it will be convenient to discuss the following:

Amendment 2, in clause 88, page 95, line 9, after “contribute” insert

“to the mitigation of flooding and”.

This amendment would require neighbourhood development plans to be designed to secure that the development and use of land in the neighbourhood area contribute to flood mitigation.

New clause 2—Minimum requirements for flood mitigation and protection—

“(1) The Secretary of State must, before the end of the period of six months beginning on the day this Act is passed, use the power under section 1 of the Building Act 1984 to make building regulations for the purpose in subsection (2).

(2) That purpose is to set minimum standards for new build public and private properties in England for—

(a) property flood resilience,

(b) flood mitigation, and

(c) waste management in connection with flooding.”

This new clause would require the Government to set minimum standards for flood resilience, flood mitigation and flood waste management in building regulations.

New clause 3—Duty to make flooding data available—

“(1) The Secretary of State and local authorities in England must take all reasonable steps to make data about flood prevention and risk publicly available.

(2) The duty under subsection (1) extends to seeking to facilitate use of the data by—

(a) insurers for the purpose of accurately assessing risk, and

(b) individual property owners for the purpose of assessing the need for property flood resilience measures.”

This new clause would place a duty on the Government and local authorities to make data about flood prevention and risk available for the purpose of assisting insurers and property owners.

New clause 4—Flood prevention and mitigation certification and accreditation schemes—

“(1) The Secretary of State must by regulations establish—

(a) a certification scheme for improvements to domestic and commercial properties in England made in full or in part for flood prevention or flood mitigation purposes, and

(b) an accreditation scheme for installers of such improvements.

(2) The scheme under subsection (1)(a) must—

(a) set minimum standards for the improvements, including that they are made by a person accredited under subsection (1)(b), and

(b) provide for the issuance of certificates stating that improvements to properties have met those standards.

(3) The scheme under subsection (1)(a) may make provision for the certification of improvements that were made before the establishment of the scheme provided those improvements meet the minimum standards in subsection (2)(a).

(4) Regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(5) A draft statutory instrument containing regulations under this section must be laid before Parliament before the end of the period of six months beginning with the day on which this Act comes into force.”

This new clause would require the Government to establish a certification scheme for improvements to domestic and commercial properties in England made for flood prevention or flood mitigation purposes and an accreditation scheme for installers of such improvements.

New clause 5—Insurance premiums—

“(1) The Financial Conduct Authority must, before the end of the period of six months beginning on the day this Act is passed, make rules under the Financial Services and Markets Act 2000 requiring insurance companies to take into account the matters in subsection (2) when calculating insurance premiums relating to residential and commercial properties.

(2) Those matters are—

(a) that certified improvements have been made to a property under section [flood prevention and mitigation certification and accreditation schemes], or

(b) that measures that were in full or in part for the purposes of flood prevention or mitigation have been taken in relation to the property that were requirements of the local planning authority for planning permission purposes.”

This new clause would require the Financial Conduct Authority to make rules requiring insurance companies to take into account flood prevention or mitigation improvements that are either certified or planning permission requirements in setting insurance premiums.

New clause 6—Flood Reinsurance scheme eligibility—

“(1) The Secretary of State must, before the end of the period of six months beginning on the day this Act is passed—

(a) establish a new Flood Reinsurance scheme under section 64 of the Water Act 2014 which is in accordance with subsection (2), and

(b) lay before Parliament a draft statutory instrument containing regulations under that section to designate that scheme.

(2) A new Flood Reinsurance scheme is in accordance with this section if it extends eligibility to—

(a) premises built on or after 1 January 2009 which have property flood resilience measures that meet the standard under section [minimum requirements for flood mitigation and protection](2)(a), and

(b) buildings insurance for small and medium-sized enterprise premises.

(3) The Secretary of State may by regulations require public bodies to share business rates information with the scheme established under subsection (1)(a) for purposes connected with the scheme.

(4) The Water Act 2014 is amended in accordance with subsections (5) to (9).

(5) In section 64 (the Flood Reinsurance scheme), after “household premises”, in each place it occurs, insert “and small and medium-sized enterprise premises”.

(6) In section 67 (scheme administration), after “household premises”, in each place it occurs, insert “and small and medium-sized enterprise premises”.

(7) After section 69 (disclosure of HMRC council tax information) insert—

“69A

Disclosure of business rates information

(1) The Secretary of State may by regulations require public bodies to disclose information relating to business rates to any person who requires that information for either of the following descriptions of purposes—

(a) purposes connected with such scheme as may be established and designated in accordance with section 64 (in any case arising before any scheme is so designated);

(b) purposes connected with the FR Scheme (in any case arising after the designation of a scheme in accordance with section 64).

(2) A person to whom information is disclosed under regulations made under subsection (1)(a) or (b)—

(a) may use the information only for the purposes mentioned in subsection (1)(a) or (b), as the case may be;

(b) may not further disclose the information except in accordance with those regulations.”

(8) In section 82(5) (interpretation)—

(a) for “69” substitute “69A”;

(b) after “household premises” insert “small and medium-sized enterprise premises”.

(9) In section 84(6) (regulations and orders), after paragraph (e) insert—

“(ea) regulations under section 69A (disclosure of business rates information),”.”

This new clause would require the Government to extend the FloodRe scheme to premises built since 2009 that have property flood resilience measures that meet minimum standards and buildings insurance for small and medium-sized enterprise premises.

New clause 7—FloodRe Build Back Better scheme participation—

“(1) The Financial Conduct Authority must, before the end of the period of six months beginning on the day this Act is passed, make rules under the Financial Services and Markets Act 2000 requiring insurance companies to participate in the FloodRe Build Back Better scheme to reimburse flood victims for costs of domestic flood resilience and prevention measures.

(2) In making those rules the Financial Conduct Authority must have regard to its operation objectives to—

(a) protect consumers, and

(b) promote competition.”

This new clause would require the Financial Conduct Authority to make rules requiring insurance companies to participate in the currently voluntary Build Back Better scheme, which was launched by FloodRe in April 2022.

[Rachael Maskell]

I am indebted to my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) for tabling many of these new clauses in order to address the issue of flooding. However, I will first turn to amendment 133, which I tabled. At the time I tabled it, nobody could have predicted the day on which we would debate it, when temperatures are soaring to the highest the country has ever seen. Nevertheless, that highlights the importance of addressing the issue of drought.

Drought is a serious consideration for the Environment Agency, and it is really important that we are prepared for it. At the moment, we are seeing that, as a country, we are clearly not prepared. With the globe heating up, we know that this is the future, unless there is a serious reorientation around wider policy planning.

We are hearing loud and clear the importance of addressing issues of drought—looking at water supply and soil health, which is vital, and at construction. Planning has a massive impact on flooding as well as on droughts, so it is important that we look at how we move that forward.

It is also important that we look at mitigation of flood risk, which is addressed in amendment 2 and will lead us to the specifics of the new clauses. Scientists are saying today that we are now reaching the point where mitigation may not be possible, and that we will have to consider adaptation, so we are arriving at a very serious juncture in how we prevent, and protect our planet from, further degradation.

--- Later in debate ---

[Mr Jones]

I fully understand why flooding is a matter of particular importance to the hon. Members for Kingston upon Hull West and Hessle and for York Central, as well as other hon. Members, given the flood risk in many constituencies and the devastation caused by flooding. It should concern us all across the House. Although they are linked by that concern, it makes sense to deal with each of the amendments in turn rather than all together.

I take amendments 2 and 133 first: since 2009, climate change adaptation and mitigation has been a key part of the planning system. The management and mitigation of flood and drought risks is a central component of that. We are already strengthening that through the Bill. Clause 88 amends existing legislation to put beyond doubt that neighbourhood planning groups should consider climate change adaptation and mitigation.

Furthermore, to support communities, in 2020 the Centre for Sustainable Energy published a guide to policy writing and community engagement for low-carbon neighbourhood plans, which covers flood and drought risk policy as well as mitigation techniques and infra-structure that they might wish to consider in their plans. Specific reference to flooding and drought in that provision would not strengthen the commitment but might unintentionally undermine focus on other aspects of climate change adaptation and mitigation. Our view, therefore, remains that the duty is most effective when it takes all the causes and effects of climate change together.

On new clause 2, managing flood risk is a Government priority. We are investing £5.2 billion to better protect 336,000 properties, alongside a range of actions to increase resilience to flood risk. Statutory guidance on the building regulations already promotes the use of flood resilient and resistant construction in flood prone areas. However, the building regulations system does not deal with the whole interconnected system of responsibility for managing flood risk. Drainage systems for new developments are already required to be built to a standard that minimises flooding. Those duties sit outside the building regulations system.

Furthermore, the national planning policy framework already makes it clear that inappropriate development in areas at risk of flooding should be avoided. Where necessary, there is an expectation that a development should be made safe for its lifetime without increasing flood risk elsewhere. In combination, I hope hon. Members will agree that the effect of the new clause is already provided for in wider systems in place for flood mitigation and protection.

Similarly, on new clause 3, we agree that communities should have access to the information they need to manage and prepare for their level of flood risk. That is why the Environment Agency publishes flood risk data and maps for England. Lead local flood authorities are also already required to have a strategy for managing flood risks in their area, which must include an assessment of local flood risk. All that information is already openly available to both insurers and householders. As such, I hope that hon. Members will agree that new clause 3 would not add to the existing provision of data.

Again, I hope the Committee will not be surprised that we agree with the intention behind new clauses 4 and 5. That is why, in July 2021, we committed to publishing a property flood resilience road map by the end of 2022 to ensure that all relevant bodies are playing their part, and that consumers have assurance about the quality of products and their installation.

The road map will set a national, strategic policy framework for property flood resilience and set out our—and the industry’s—approach to addressing the barriers to property flood resilience uptake. That includes exploring the best approach to ensure that property flood resilience professionals undertake work that meets industry standards, and establishing mechanisms to collect the evidence insurers need to recognise property flood resilience and factor it into their premiums.

As I have already said, we are clear that inappropriate new development in floodplains should be avoided, and must be made safe and resilient where they have to occur, without increasing flooding risks elsewhere. That is why Flood Re does not extend to homes built after 2009. Similarly, Flood Re was designed to provide available and affordable insurance for households. It does not cover businesses.

Business insurance operates differently to household insurance; it is often more bespoke, based on the individual nature of the business. In addition, Flood Re is funded via a levy on household insurers. Expanding its scope to cover businesses would require a new levy on businesses, which could result in businesses and therefore customers across the country subsidising profit-making organisations located near rivers or the coast, often to their advantage. That is one of the delicate issues that must be considered. Although it is undoubtedly an issue for some, there is no evidence of a systematic problem in accessing insurance for businesses with high flood risks. For businesses that experience problems, a number of innovative products are being offered to businesses by insurers.

Finally, on new clause 7, we have made important changes to the Flood Re scheme, helping to drive the uptake of property flood resilience. Regulations came into force in April that allow Flood Re to pay claims from insurers who pass flood risk on to the scheme. That includes an amount of “resilient repair”, up to a value of £10,000 over and above the cost of like-for-like repairs, to enable homeowners to return to their homes more quickly following a flood and to reduce the cost of future claims.

Build back better has deliberately been introduced on a voluntary basis. We aim to drive a cultural shift across the insurance market, raising awareness and demand for property flood resilience and helping to capture evidence on the benefits of property flood resilience to support future changes. Hon. Members may also be aware that customers of insurers covering more than 50% of the market are already able to benefit from Build Back Better. We continue to encourage more household insurers to participate in the scheme. In light of those assurances and explanations, I hope that hon. Members will be willing to withdraw the amendments.

[Rachael Maskell]

I am grateful for the debate. I thank the hon. Member for Westmorland and Lonsdale for highlighting the importance of the upper catchment management work, which is so necessary for mapping what will happen across other communities, and the Environment Agency’s commitment and the work it is doing in that arena.

My hon. Friend the Member for Greenwich and Woolwich hit the nail on the head when he talked about the importance of cross-governmental working, which is clearly not at an optimum at the moment when addressing issues around flooding. While the Minister has talked through a number of steps the Government are taking, I refer him back to the 2016 national flood resilience strategy, which highlighted the importance of co-ordination across Government and of ensuring that resilience was built into the system. That is not happening at the moment. As much as policy may aspire to that, it has further to go. The amendments are therefore still relevant as the Bill does not meet the requirements of the communities that currently flood, and those that will flood in the future as we see weather patterns change and risk increase.

I am not planning to press the amendment to a vote, but I hope the Government will reflect on it, and on my amendment about drought, because this is a significant and serious issue. Right now we recognise that as we move forward we need to build in how we have sufficient water supply. That will be increasingly important. I reserve the right to bring the issue back up on Report, and to give the opportunity to my hon. Friend the Member for Kingston upon Hull West and Hessle to table her amendments too. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 110, clause 88, page 95, line 17, at end insert—

“(5) After subsection (4) insert—

‘(4A) A neighbourhood development plan which is in effect on the day on which section 88 of the Levelling-up and Regeneration Act 2023 comes into force may remain in effect contrary to the provisions of that section no longer than until the end of the period of five years beginning on the day on which that section comes into force.’”

--- Later in debate ---

[Matthew Pennycook]

To surprise the Minister—it is the other way round—I am entirely reassured by his response. The language in the clause is about allowing for private infrastructure companies to be involved in the plan-making process in terms of the provision of information. That is what I took from what he said. I appreciate what the Minister said about the potential disproportionate impact from drawing in other types of bodies; that was not the intention. On that basis, I am content and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 135, in clause 90, page 96, line 30, at end insert—

“(3A) Where regulations under this section make requirements of a local authority that is failing to deliver a local plan in a timely way, the plan-making authority must consult the local community on the contents of the relevant plan.”.

This amendment would require, in the event of a local authority failing to deliver a local plan in a timely way, those taking over the process to consult with the community.

I will not labour the point because we have already had extensive discussions about the need to break the deadlock in the planning system. York is a very live example of that need: the local plan is going through a very painful process and we are absolutely determined to see the plan amended rather than being imposed. To break the deadlock and to be able to move forward, it is right that communities get a greater say. I do not plan to push the amendment to a vote today, but I trust that the Minister is hearing the importance of being able to engage with communities in order to get the right outcomes in the planning system, particularly where there is deadlock and we are on the naughty step, or at the special measures stage of the process.

[Mr Jones]

The amendment would modify clause 90 to support the more effective gathering of information required for authorities producing plans. However, its substance relates more to the plan intervention powers in proposed new section 15HA of the PCPA 2004, as inserted by schedule 7, and the importance of community engagement in plan making.

It is vital that communities are given every opportunity to have their say on draft local plans and supplementary plans. The English planning system already gives communities a key role so that they can take an active part in shaping their areas, and in doing so build local pride and belonging. We do not seek to challenge that; in fact, we are strengthening it through the Bill, and I have set out elsewhere how this will be achieved. Intervention powers have been used only sparingly in the past, and that is expected to remain the case under the plan-making system. However, they act as an important safety net and ensure that all areas can benefit from having an up-to-date local plan in place.

I would like to reassure the Committee that if the Secretary of State or a local plan commissioner were ever to take over plan preparation by using the intervention powers in proposed new section 15HA of the PCPA, the plan would need to undergo public consultation, just like any other plan. Like other procedural requirements, this will be set out through secondary legislation using the powers set out elsewhere in the Bill. Incorporating the amendment into clause 90 is therefore unnecessary. I hear that the hon. Member for York Central will not press the amendment to a Division, but I hope that I have been able to reassure her on this occasion.

[Rachael Maskell]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 134, in clause 90, page 97, line 8, after “activities” insert—

“undertaken not more than 5 years from completion of the plan”.

This amendment seeks to ensure that material used in plans would not be older than 5 years old to still have relevance to the planning process.

In previous discussions, I have stressed the importance of ensuring that we have relevant and up-to-date information, made available in a timely way, to display the realities of situations as they stand, and we have suggested a timeframe for work around that. Circumstances change in the planning system, and I can think of a number of things that have changed in my own community—whether it is around transport planning in the area, population demographic changes or, indeed, situations like the one we are dealing with at the moment, where we are seeing a real change in the number of displaced people.

We think about the Afghans we cannot house: 12,000 of them have been in hotels for a year now. We were discussing the climate crisis earlier, and we know that 100 million people are displaced across our planet. Some of them will come to the UK and need housing. Things such as the Afghanistan crisis suddenly shift the dial, yet we do not have housing for these people. That is why it is so important to ensure that we are not relying on old information but have relevant and up-to-date information in our planning system, so we can break the deadlocks that can occur by being dependent on old data. The purpose of the amendment is to ensure that the planning system is more reflective of the now, as opposed to the past—a point that I have made a number of times. Unfortunately, that impacts on the outcome of the planning process.

[Mr Jones]

Clause 90 is about helping planning authorities to gather the information they need to plan effectively. It does that by requiring those organisations responsible for vital local services to assist in creating plans. We want to ensure that planning authorities can receive that assistance across a range of scenarios and issues.

I understand that the amendment is motivated by a desire to ensure that local plan evidence is up to date. Unfortunately, its effect would be to limit planning authorities use of this power to create effective plans. The amendment applies a blanket five-year time limit on the use of the power in clause 90 in advance of plan adoption, which makes it insensitive to the circumstances or type of information involved. There are many cases where it would be vital to include information gathered more than five years before a plan was adopted. For example, the character study of a conservation area might well be relevant for more than five years, as we have discussed in relation to the hon. Member’s constituency. The same goes for a utilities assessment based on information from energy networks, which work on different, longer term business planning cycles. If, for instance, the preparation of a local plan was delayed for any reason, the arbitrary time limit would prevent more information being taken into account, as the power needed to gather it could not be used.

The Government agree, however, that local plans should be backed by relevant and up-to-date evidence, which is why the evidence supporting plans will continue to be tested at the public examination. That is the place where any issues with the relevance of evidence can be addressed. I hope that with these reassurances, the hon. Member will seek to withdraw the amendment.

[Rachael Maskell]

I hear what the Minister is saying, but he raises an important point about the different business planning cycles that involve different factors. There is certainly a need for greater co-ordination to ensure that the relevant data is available in a timely way so that it is more synced with the planning process. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 90 ordered to stand part of the Bill.

Clause 91 ordered to stand part of the Bill.

Schedule 8 agreed to.

Ordered, That further consideration be now adjourned. —(Gareth Johnson.)

Levelling-up and Regeneration Bill (Fourteenth sitting)

Rachael Maskell Excerpts

Committee stage
Thursday 14th July 2022 Public Bill Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I beg to move amendment 87, in clause 84, page 92, line 9, leave out lines 9 to 16 and insert—

“(2) Before designating a policy as a national development management policy for the purposes of this Act the Secretary of State must carry out an appraisal of the sustainability of that policy.

(3) A policy may be designated as a national development management policy for the purposes of this Act only if the consultation and publicity requirements set out in clause 38ZB, and the parliamentary requirements set out in clause 38ZC, have been complied with in relation to it, and—

(a) the consideration period for the policy has expired without the House of Commons resolving during that period that the statement should not be proceeded with, or

(b) the policy has been approved by resolution of the House of Commons—

(i) after being laid before Parliament under section 38ZC, and

(ii) before the end of the consideration period.

(4) In subsection (3) ‘the consideration period’, in relation to a policy, means the period of 21 sitting days beginning with the first sitting day after the day on which the statement is laid before Parliament under section 38ZC, and here ‘sitting day’ means a day on which the House of Commons sits.

(5) A policy may not be designated a national development management policy unless—

(a) it contains explanations of the reasons for the policy, and

(b) in particular, includes an explanation of how the policy set out takes account of Government policy relating to the mitigation of, and adaptation to, climate change.

(6) The Secretary of State must arrange for the publication of a national policy statement.

38ZB Consultation and publicity

(1) This section sets out the consultation and publicity requirements referred to in sections 38ZA(3) and 38ZD(7).

(2) The Secretary of State must carry out such consultation, and arrange for such publicity, as the Secretary of State thinks appropriate in relation to the proposal. This is subject to subsections (4) and (5).

(3) In this section ‘the proposal’ means—

(a) the policy that the Secretary of State proposes to designate as a national development management policy for the purposes of this Act or

(b) (as the case may be) the proposed amendment (see section 38ZD).

(4) The Secretary of State must consult such persons, and such descriptions of persons, as may be prescribed.

(5) If the policy set out in the proposal identifies one or more locations as suitable (or potentially suitable) for a specified description of development, the Secretary of State must ensure that appropriate steps are taken to publicise the proposal.

(6) The Secretary of State must have regard to the responses to the consultation and publicity in deciding whether to proceed with the proposal.

38ZC Parliamentary requirements

(1) This section sets out the parliamentary requirements referred to in sections 38ZA(3) and 38ZD(7).

(2) The Secretary of State must lay the proposal before Parliament.

(3) In this section ‘the proposal’ means—

(a) the policy that the Secretary of State proposes to designate as a national development management policy for the purposes of this Act or

(b) (as the case may be) the proposed amendment (see section 38ZD).

(4) Subsection (5) applies if, during the relevant period—

(a) either House of Parliament makes a resolution with regard to the proposal, or

(b) a committee of either House of Parliament makes recommendations with regard to the proposal.

(5) The Secretary of State must lay before Parliament a statement setting out the Secretary of State's response to the resolution or recommendations.

(6) The relevant period is the period specified by the Secretary of State in relation to the proposal.

(7) The Secretary of State must specify the relevant period in relation to the proposal on or before the day on which the proposal is laid before Parliament under subsection (2).

(8) After the end of the relevant period, but not before the Secretary of State complies with subsection (5) if it applies, the Secretary of State must lay the proposal before Parliament.

38ZD Review of national development management policies

(1) The Secretary of State must review a national development management policy whenever the Secretary of State thinks it appropriate to do so.

(2) A review may relate to all or part of a national development management policy.

(3) In deciding when to review a national development management policy the Secretary of State must consider whether—

(a) since the time when the policy was first published or (if later) last reviewed, there has been a significant change in any circumstances on the basis of which any of the policy set out in the statement was decided,

(b) the change was not anticipated at that time, and

(c) if the change had been anticipated at that time, any of the policy set out would have been materially different.

(4) In deciding when to review part of a national development management policy (‘the relevant part’) the Secretary of State must consider whether—

(a) since the time when the relevant part was first published or (if later) last reviewed, there has been a significant change in any circumstances on the basis of which any of the policy set out in the relevant part was decided,

(b) the change was not anticipated at that time, and

(c) if the change had been anticipated at that time, any of the policy set out in the relevant part would have been materially different.

(5) After completing a review of all or part of a national development management policy the Secretary of State must do one of the following—

(a) amend the policy;

(b) withdraw the policy's designation as a national development management policy;

(c) leave the policy as it is.

(6) Before amending a national development management policy the Secretary of State must carry out an appraisal of the sustainability of the policy set out in the proposed amendment.

(7) The Secretary of State may amend a national development management policy only if the consultation and publicity requirements set out in section 38ZB, and the parliamentary requirements set out in section 38ZC, have been complied with in relation to the proposed amendment, and—

(a) the consideration period for the amendment has expired without the House of Commons resolving during that period that the amendment should not be proceeded with, or

(b) the amendment has been approved by resolution of the House of Commons—

(i) after being laid before Parliament under section 38ZA, and

(ii) before the end of the consideration period.

(8) In subsection (7) ‘the consideration period’, in relation to an amendment, means the period of 21 sitting days beginning with the first sitting day after the day on which the amendment is laid before Parliament, and here ‘sitting day’ means a day on which the House of Commons sits.

(9) If the Secretary of State amends a national development management policy, the Secretary of State must—

(a) arrange for the amendment, or the policy as amended, to be published, and

(b) lay the amendment, or the policy as amended, before Parliament.”

This amendment stipulates the process for the Secretary of State to designate and review a national development management policy including minimum public consultation requirements and a process of parliamentary scrutiny based on processes set out in the Planning Act 2008 (as amended) for designating National Policy Statements.

It is a pleasure to serve with you in the Chair, Mr Hollobone. We had an extensive debate on Tuesday about the powers provided by clause 83 and the fact that they represent, in our view, an unacceptable centralisation of development management policy and a downgrading of the status and remit of local planning. Clause 84 is important, and the provisions in it relate directly to the previous debate, because it sets out what constitutes a national development management policy and provides the statutory basis for such policies and their operation.

As hon Members will note, the clause provides an extremely broad definition of what a national development management policy is, with proposed new subsection 38ZA(1) clarifying that an NDMP can be anything relating to development or use of land in England that the Secretary of State, by direction, designates as such a policy. Proposed new subsection 38ZA(2) provides for powers that allow the Secretary of State to modify or revoke a national development management policy, and proposed new subsection 38ZA(3) makes it clear that they have to consult about any modification or revocation only if they believe it is appropriate to do so. Given the fact that, as we spent a lengthy period of time considering in the last sitting, it is the Government’s intention that national development management policies will override local development plans in the event of any conflict between the two, we are strongly of the view that the powers clause 84 provides the Secretary of State with are unacceptably broad.

I ask Government Members to look up from their digital devices for a moment and to consider precisely what the Government are proposing here and the future implications of that for their constituencies and the individual communities they represent. These powers would allow a future Minister, of whatever political allegiance, to develop an NDMP that could encompass literally any policy designated by them as relating to development or use of land in England; to determine not to consult on the development of that policy or its modification if they saw fit; and then to use that policy to overrule any local or neighbourhood plan in conflict with it at the stroke of a pen. No one who values localism and the role of effective local and neighbourhood plans in enabling communities to develop a shared vision for their area should feel comfortable with the provisions in the clause.

Amendment 87 simply seeks to impose a degree of transparency and accountability when it comes to the use of the powers, by clarifying the process by which the Secretary of State must designate and review a national development management policy, stipulating, first, that it must include minimum public consultation requirements, just as there are intensive consultation requirements for local plan policies, and secondly, that it must be subject to the same level of parliamentary scrutiny as is currently the case for designating national policy statements, as set out in the Planning Act 2008. It cannot be right that national policies that will have a far greater impact on local communities than any existing national policy statement and that the Government intend will trump local development plans in the event of a conflict can be developed without any public consultation or parliamentary approval process.

If the clause is left unamended, the danger is twofold. First, we fear that the use of the powers will be viewed by the public as yet another means of disempowering communities and hoarding more control at the centre, with all the implications that has for public engagement in a planning system that already suffers from low levels of trust and confidence, with people feeling that their concerns are overlooked and their interests subordinated to other priorities.

Secondly, without a minimum of public consultation or parliamentary oversight in designing NDMPs the Government are far more likely to get it wrong, because they will be developing and designating national policy without appropriate input from communities and their representatives about how the needs and aspirations of their areas are best served. If the Government are determined to force through a suite of NDMPs covering the broad range of policies that, to repeat the test set out in the policy paper, “apply in most areas” and to render local development plans subordinate to them in the event of a conflict, the least they can concede is that the Secretary of State be directed to consult with institutions, authorities and other bodies before making, revoking or modifying NDMPs—not just the initial suite of NDMPs, but any that follow in future years—and to ensure that appropriate parliamentary oversight takes place.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to my hon. Friend for his amendment and the speech he has just made. This is the pivotal part of the whole Bill. It is about ensuring that there is a full and proper process—one that should eliminate risk and maximise the representation of local interest.

We had a really helpful discussion on Tuesday that explored why the amendment was needed in the first place, and I am sure the Minister soon recognised the democratic deficit the Bill would create. The Government have left a hole in the Bill, because it defines the process for establishing a national development management strategy but not the extent to which the strategy could apply, and it also fails to take forward the considerations of our communities. This provision does not belong in primary legislation, and the Minister should reflect today and over the summer on what his Government are trying to do.

The Minister said that he will be developing more detail over the summer, but we are considering the Bill line by line today. As my hon. Friend outlined, his amendment has done the work on how to govern the process for the Minister. First, on designation, there must be an in-depth consultation and any issue must come before Parliament. If an issue is of such magnitude that it requires Government to say that they need to override a local plan, surely there has to be a proper process. After all, planning does not just suddenly occur. I was scratching my head about what would constitute a national emergency that required planning permission. The only thing I could think of—the Minister may correct me—would be a war, but then we would have separate legislation to address that. On Tuesday, the Minister himself struggled to articulate where the thresholds would be and exactly what would constitute such a situation.

I have been thinking further about how our planning process is devised and the importance of co-production within our planning process. Why would this national development management strategy override a process of local planning? There could be no reason. If we think about unpopular things that the Government want to force through, such as mining hydrocarbons, fracking and so on, they should not be happening, because our planet cannot sustain their use. The same applies to building road infrastructure, but then again there are processes and national policy statements that can be made for those things.

High Speed 2 or an airport are perhaps the only other examples. We cannot sustain more air travel because of the climate crisis, and HS2 had a national policy statement —again, it has had its own legislation and processes. I really cannot imagine what is in the Government’s mind that is of such magnitude that it should require the overriding of a local plan and the hopes and aspirations of our local communities. Certainly in my community, local people have not had their aspirations heard in the planning process, because we have not had a local plan. There has been imposition by developers, using the powers they have, and it has just run into conflict, gridlock and pain. I cannot see why a Government would want to excite that in a community.

I am sure the Minister will give serious consideration to this matter, if not today, then through the summer. Opposition Members have made it clear that these clauses are an unnecessary development, but I am sure the Minister will hear that point even louder from Government Members.

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a pleasure to serve under your guidance today, Mr Hollobone. This proposal from the Government feels rather tin-eared, and the amendment—or something like it, at the very least—seems appropriate. It is good that the official Opposition have put forward a route that the Government could choose to go down.

It seems odd that there is not a worked-out process for properly scrutinising and consulting on national policy statements that could have huge ramifications for every part of this country. This is a very diverse country: we have four nations, and communities that are rural, urban and suburban. National planning policy could have many different ramifications on different communities.

I think of my own community, with 67 parish councils and the need for them to be involved and to understand the issues. Further north in Cumbria, we have the very live issue of Britain’s first new coalmine in 30 years potentially being given permission later this summer—we will wait and see about that. It will be hugely significant for the community it could impact directly, but it will also have a national impact. For us not to have a level of scrutiny and consultation for national plans—something that a local authority would be slaughtered for not doing with its own local plans—seems to be very wrong and, as I say, somewhat tin-eared.

It goes back to a theme that I have tried to develop throughout debates on this Bill, which is about trying to understand the motivation. It could be that the Government are just being tin-eared and have not thought this through properly. That is entirely possible—Governments do that. The question is, who is this for? Is this devolution? Is this empowering local communities? That is what the Government claim it is. Or is it just for the convenience of central Government? If there are national plans and a national planning framework allowing Government to take forward their central agenda without proper consultation of local communities—be they rural or urban or in any part of this country—that will meet with huge opposition, including in the constituencies of Opposition Members.

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[Mr Jones]

I understand what the hon. Member says, but clearly this process will take some time. There are other parts of the process that follow today’s proceedings and Committee stage. By the time we get to that point, I am sure hon. Members will have been able to see the national planning policy prospectus and understand it more fully.

[Rachael Maskell]

I am grateful that the Minister was able to produce an example of where a national planning decision would override a local plan, but he talked about logistics, which does not come into the local planning process. That example was operational—it was not actually to do with planning. Can he drill down to say when a national development management policy would override a local plan?

Levelling-up and Regeneration Bill (Thirteenth sitting)

Rachael Maskell Excerpts

Committee stage
Tuesday 12th July 2022 Public Bill Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Sir Mark. I take the opportunity to echo the sentiments expressed by my hon. Friend the Member for Nottingham North in warmly welcoming the new Ministers to their places and in thanking their predecessors—the Minister of State, Ministry of Justice, the right hon. Member for Pudsey (Stuart Andrew), and the hon. Member for Harborough (Neil O’Brien)—for the constructive way in which they engaged with us and the thoughtful manner in which they approached the consideration of the Bill. On the basis of this morning’s proceedings, I am confident that we will continue in that vein.

Turning to amendment 118, the hon. Member for Westmorland and Lonsdale is a doughty champion for his constituents on this issue. He will know from previous debates in the House on this subject that we are in complete agreement that the Government need urgently to commit to far bolder action. It is not in dispute that a balance needs to be struck when it comes to second homes and short-term holiday lets; no one is arguing that they are of no benefit to local economies, but the potential benefits associated with them must continually be weighed against their impacts on local people.

At present, the experience of a great many rural, coastal and, indeed, urban communities makes it clear that the Government have not got the balance right. The problem is not second homes and short-term holiday lets per se; as the hon. Member for Westmorland and Lonsdale said, it is excessive numbers of them in a given locality. While individual hon. Members will have a clear sense of the communities in their constituencies that are affected by this problem, the hon. Gentleman is absolutely right to highlight with the amendment the fact that we do not know the precise number of second homes and holiday lets across the country, or their distribution.

Members have heard me say this before, but council tax records are likely to significantly undercount second homes, both because there is no financial incentive to register a property in areas where a council tax discount is no longer offered, and because second home owners can still avoid council tax altogether by claiming that their properties have moved from domestic to non-domestic use.

The estimates of second home ownership produced by the English housing survey are more reliable, but even they are based on a relatively small sample and rely on respondents understanding precisely what is meant by a second home and accurately reporting their situation. Similar limitations apply to short-term lettings. There is no single definitive source of data on rates for what is, after all, an incredibly diverse sector, with providers offering accommodation across multiple platforms.

It therefore strikes us as entirely logical that as well as considering what more might be done to mitigate the negative impact of excessive rates of second home ownership and short-term and holiday lets, the Government should consider whether digitisation of the planning system could allow us to better capture data on overall rates and provide a better sense of which parts of the country face the most acute challenges. We therefore very much support amendment 118, and we hope the Minister will give it serious consideration.

[Rachael Maskell (York Central) (Lab/Co-op)]

I, too, support the amendment. Data is key to everything: we cannot make good, informed, evidence-based decisions unless we have data before us. In my community, I have seen my boundaries change because of the number of empty properties and people not registering. I have seen a real change street by street as well as community by community. Second homes, commuter homes and holiday homes are taking over residential properties, which my local residents cannot afford to live in any more due to the lack of supply. As a result, they are having to move out of my city. We have to look at this extraction economy through the eyes of the people it impacts the most, and collecting data is absolutely key to that.

There is another reason I think data is really important. The Government are driving their whole housing policy through numbers. They are saying, “We are going to build x units in each of these locations across the country.” We have heard hon. Members in various debates discuss whether those levels are right, but if those housing units simply become empty units, second homes or holiday lets, that will not resolve the housing crisis we are dealing with. It will not add to our communities or make a difference to them. It will not have an impact on Government targets for addressing the housing crisis. It is essential that we can identify the issue in the detail it deserves, not just in whole areas but drilling down to understand what is happening in different parts of the community.

In York, we have around 2,000 Airbnbs—last time I checked, the number was 1,999. The vast majority are concentrated in my constituency of York Central. I can name the streets where those properties are. The number of homes is increasing in those areas. We will go on to talk about measures that the Government can introduce—measures that I very much hope they will introduce—to address this serious problem, which is sucking the life out of our community. If we have up to 350,000 Airbnbs nationally, what does that mean for Government targets for house building? How are they going to say they are building additional homes when we are seeing that sharp increase in Airbnbs, second homes and so on?

The Government need the data to drive their own housing policy and to ensure that they are delivering on their targets for improving the housing situation, rather than just watching it get worse while they busily tick boxes and say, “We are delivering, delivering, delivering,” when it is not making a scrap of difference on the ground. That is the feeling in my community. I welcome the amendment. It is a helpful start and a helpful guide to the Government about some of the considerations they should be taking into account in the planning system.

[The Minister of State, Department for Levelling Up, Housing and Communities (Mr Marcus Jones)]

I thank the hon. Member for Greenwich and Woolwich for his kind welcome and good wishes. I look forward to working with him across the Dispatch Box, in a reasonable and constructive way.

We spoke at length earlier about second homes, which I suspect will be a running theme for the Committee. We talked about the importance of addressing the issues that can be caused by second homes and holiday lets in an area. I want to focus on why the amendment is not needed.

We acknowledge the importance of data on holiday lets for supporting tourism and manging the impacts on local communities. However, I believe that there may have been some misrepresentation of the intent of clause 75. The clause aims to require planning authorities to process their planning data in accordance with approved data standards, whereas the amendment seeks to regulate for the collection of data by planning authorities. Nothing in the clause can require the collection of data by planning authorities.

Having said that, let me add a point of reassurance: where planning authorities have holiday let data, subsection (2)(b) provides the ability for data standards to be set for it. The amendment tabled by the hon. Member for Westmorland and Lonsdale is not necessary to achieve his intention. Regulations will specify which planning data can be made subject to data standards and require planning authorities to comply with those standards once created.

We will turn to the substance of second homes and short-term let policy in due course. We take the concerns raised by the hon. Member for Westmorland and Lonsdale seriously. I hope that I have provided sufficient reassurance at this point to allow him to withdraw his amendment.

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[Matthew Pennycook]

I beg to move amendment 66, in clause 77, page 87, line 3, at end insert—

“(4) On the day any regulations under this section are laid before Parliament the Secretary of State must publish an accompanying statement explaining the steps that the Government has taken to ensure that the regulations do not exacerbate digital exclusion.”

This amendment would require the Secretary of State to publish a statement explaining how the provisions in this Chapter do not exacerbate digital exclusion.

As we discussed in relation to development plans, Labour believes that a series of safeguards are necessary to ensure that the digitisation of the planning system does not have adverse consequences. One of the most adverse consequences that could arise from digitising the present system—we have already touched on it—is of course the exacerbation of digital exclusion, which several of the witnesses who gave oral evidence to the Committee highlighted as a concern. Digital exclusion is already a serious problem and one that does not simply affect a minority of the population. The Office for National Statistics estimates that 7.8% of UK adults have either never used the internet or last used it more than three months ago—that is 4.2 million people. The amendment seeks to address the digital divide in the context of the planning system.

When we discuss digital exclusion in the context of the Bill, it warrants saying, as my hon. Friend the Member for York Central did, that a democratic planning system that takes seriously the right of communities to be heard and to participate effectively in every aspect of development plan formulation can never be entirely digital. As Dr Hugh Ellis told the Committee:

“We can have as much digital information as we like, but we also need access to the arenas where decisions are made”.”––[Official Report, Levelling-up and Regeneration Public Bill Committee, 23 June 2022; c. 126, Q157.]

I make that point simply to stress that meaningful engagement with the planning process requires in-person access to key decision-making forums, and the Bill erodes that right in important respects. That is why we will seek to amend clauses 82 to 84 and schedule 7 in due course.

When it comes to planning data, it is evidently not the case that everyone will be able to access information digitally even once it has become more accessible, as the Bill intends. For some people, that might be because they are digitally literate but do not have the proper means to engage with online data, and that concern was raised by Jonathan Owen, the chief executive of the National Association of Local Councils, in his evidence to the Committee, who suggested the potential need for capital investment to enable remote communities such as his own to engage with online material. Otherwise, it might simply be because a small but significant proportion of the population would not be able to engage with online data even if they had the means of accessing it.

In short, digital exclusion is not merely about whether people can access the internet but about their ability to use it, and a small but significant proportion of the population struggle to do so. The most recent UK consumer digital index published by Lloyds bank estimates that 21% of adults—11 million people—do not have the essential digital skills needed for day-to-day life.

[Rachael Maskell]

I am grateful to my hon. Friend for making this point. It is so important that we ensure that the planning process is accessible to everyone. The all-party parliamentary group on ageing and older people carried out a mini inquiry into the issue of digital exclusion. Its findings show that being able to access the planning process will be excluded from so many people. Does my hon. Friend agree that this is so important because often it is older people, who have slightly more time available to them—we all recognise that from our own constituencies—who do the heavy lifting on planning for everyone else in their community? If they cannot access those planning documents and the data, that will have an impact on their whole community’s ability to access the planning system.

[Matthew Pennycook]

I very much agree that, potentially, some of the proposed reforms could exclude those on whom we rely most in our communities to engage with the planning process. My hon. Friend also touches on the wider point that digital exclusion is inextricably linked to wider inequalities in our society. It is more likely to be faced by those on low incomes, disabled people and, as she said, people over the age of 65. Indeed, so close is the link between digital exclusion and other facets of poverty that it has been argued that it should be considered a key index of deprivation.

Evidence collected by the Local Government Association found that when the pandemic struck, only 51% of households earning between £6,000 and £10,000 a year had access to the internet, compared with 99% of households with an income of over £40,000. Even when poorer households had access to equipment and the internet, they were less likely to have the skills to utilise it. Clearly, to the extent that the pandemic drove many aspects of life online in ways that appear to have stuck, albeit in many instances in a hybrid form, the problem of digital exclusion has correspondingly become more acute.

I fully appreciate that the challenge posed by digital exclusion extends far beyond the issue of access to and engagement with the planning system in England. I am also fully aware that there are a range of policy initiatives beyond the remit of the Department for Levelling Up, Housing and Communities that have been put in place to address the problem—for example, funding for adults to gain a first qualification in essential digital skills. Although, as you might expect, Sir Mark, we would urge the Government to do far more to reduce the prevalence of digital exclusion. However, in the context of the Bill, the fact that digitisation of the planning system is a key feature of it, and the rationale for that is in part boosting engagement and participation, we believe that the Government need to address digital exclusion explicitly. We believe that they should do so in two ways.

First, there should be an explicit recognition that digitisation should enhance more traditional ways of communicating with the public about local planning matters, rather than replacing them entirely. Even if digitisation of the planning system proceeds apace, many people will still want and need practical help and support with understanding and engaging with the system. Simply being furnished with the opportunity to access vast quantities of data online is unlikely on its own to encourage more people to get involved in local planning. Given the chronic lack of capacity within local planning authorities, peer-to-peer, face-to-face support is extremely challenging. But established formats for communication, such as site notices, which were referenced earlier, have a role to play. We believe that they should not necessarily be removed as requirements from the system.

Secondly, there needs to be a focus on ensuring that digitisation is as inclusive as possible. In the context of clause 77 and the other related clauses, that means a focus on ensuring that planning services, data and tools are accessible to all, including those without the confidence or skills to use digital. Amendment 66 is designed to force the Government to engage more directly with those issues, and it does so simply by specifying that on the day any regulations under the section are laid before Parliament requiring certain planning data to be made publicly available, the Secretary of State also publishes a statement on how the provisions do not exacerbate digital exclusion.

I appreciate that this is not the most elegantly crafted amendment, but the issue it seeks to tackle is a real one, and the need to do so is pressing if the Government are serious about making the planning system accessible to as many members of society as possible. As such, I hope that it will elicit from the Minister a clear response, and that the digitisation that the Bill will facilitate will not exacerbate digital exclusion. I hope that by implementing new data standards reporting requirements and transparency measures in the Bill, Ministers will be actively working to adhere to digital best practice and ensure that digital planning tools are built and designed to be easy to use for all, regardless of age or accessibility needs.

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[Matthew Pennycook]

Clause 77 provides powers to require certain planning data to be made publicly available. Along with new clause 32, the amendment would require the Secretary of State to provide sufficient additional financial resources to local planning authorities to enable them to implement the changes required by chapter 2 of the Bill and, where local planning authorities have made investments in planning data software that is incompatible with the changes sought, to ensure that the Secretary of State provides compensation for the additional cost incurred by its replacement. As I argued this morning, although we believe that a series of safeguards are necessary—two of which we have just discussed in relation to amendments 65 and 66—we strongly support the digitisation of the planning system and the introduction of new data standards, reporting requirements and transparency measures as part of that process.  

It stands to reason, however, that a transformation of the kind that the Government are seeking to achieve when it comes to digitising planning will place extra demands on local planning authorities, primarily for their planning departments but also, by definition, for their IT support services. It is therefore important to require that they are provided with additional financial resources and investment. That would be the case irrespective of the current position of local planning authorities when it comes to skills, capacity and resourcing. After all, the kind of change that clauses 75 to 81 seek to facilitate, whether that be the harnessing of new digital technology, new digital engagement processes, or the integration of spatial, environmental and other datasets across England, will by their very nature frequently involve software upgrades as well as investment in other related services.

Yet the need for significant additional investment to meet the new demands that will result from the provisions in chapter 1 is made all the more acute by the parlous present state of local planning authorities when it comes to resources. The Department is well aware of that long-standing problem. For example, it has established a skills and capacity working group to determine what response is required, but precious little urgency is evident. In that respect, will the Minister tell us, when he responds, when the Department intends to publish a skills and capacity strategy and, if so, how much funding will be put behind it?

That answer aside, I am sure the Minister would agree that in general terms the pressures on local planning authorities are acute already. A report published by the National Audit Office in February 2019, entitled “Planning for new homes”, found that between 2010-11 and 2017-18 there was a 37.9% real-terms reduction in net current expenditure on planning functions by local authorities. Even when the income that authorities generated from sales, fees, and charges or transfers from other public authorities was taken into account, the report concluded that total spending on planning had fallen by 14.6% in real terms between 2010-11 and 2017-18, from £1.125 billion to £961 million.

A 2019 research paper published by the Royal Town Planning Institute found much the same, concluding that

“total expenditure on planning by local planning authorities is now just £900 million a year across England. More than half of this is recouped in income (mostly fees), meaning that the total net investment in planning is now just £400 million, or £1.2 million per local authority. This is fifty times less than local authority spending on housing welfare, and twenty times less than estimates of the additional uplift in land values which could be captured for the public during development.”

That same RTPI report also detailed the staggering regional imbalance in funding for planning, finding that the average investment in planning by local authorities in some regions is three times more per inhabitant than in others.

Put simply, as a report published by the House of Lords Built Environment Committee in January of this year put it, there is an “evolving crisis”, with local planning authorities under-resourced and consequently unable to undertake a variety of skilled planning functions effectively.

[Rachael Maskell]

I am grateful to my hon. Friend for moving the amendment. City of York Council has dispensed with the role of the chief planner, so now not only do we not have the skills, but that is really slowing down development. The Government are trying to reach their objectives and to see economic investment, but that just cannot happen without the infrastructure and, crucially, the people in place to see this forward. The amendment is excellent.

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[Mr Jones]

On the point about devolving planning to neighbourhood planning level, I expect that support will be provided by local planning authorities in that regard.

The hon. Gentleman also mentioned the type of copyright material that is in scope of infringement protection. Any information with the purpose of approving and maintaining or upgrading the planning software that falls under the definition of the planning data defined within the Bill, in which copyright subsists, is in scope of the power. One such example is architectural drawings, where the planning authorities are required to consult on new proposed developments.

The hon. Gentleman raised one other point. I am not able to confirm at the moment but will certainly write to him about the discussions that my predecessor has had with the devolved Administrations.

Question put and agreed to.

Clause 79 accordingly ordered to stand part of the Bill.

Clauses 80 and 81 ordered to stand part of the Bill.

Clause 82

Development plans: content

[Rachael Maskell]

I beg to move amendment 117, in clause 82, page 91, line 8, at end insert—

“(3A) After subsection (4) insert—

‘(4A) A local planning authority must review and update the development plan no less regularly than once every five years.’”.

This amendment would require local authorities to review and update the development plan at least every five years.

This is a probing amendment and I would be grateful for the Minister’s response. York has not had a local plan for 76 years—that is another issue that will no doubt come across the Minister’s desk—and I am trying to work through why that has been the case. There has often been a complex and rapidly changing political context in the city.

We seem to talk about local plans, development plans, minerals and waste plans, transport plans and so on as events, rather than in the context of a place’s evolution. Therefore, if there is a 10-year period—or even longer in the case of York—between plans being updated, the task is so great that it can be very challenging indeed. Thinking about how we can get some sequencing and timelines for how data is produced and how development and supplementary plans are put in place could improve the process.

I have some observations about why it has not worked in York and about the task ahead. For our city, the situation has presented many challenges because developers have taken advantage. It has caused a lot of difficulty over the years, but it has also dominated the political environment and destabilised our city, rather than stabilised the way forward.

I want to touch on the supplementary plans, which feed into the data, and to think about the pace at which things are moving forward. The local transport plan, which feeds into our development plan, dates back to 2011, and the data was gathered two years earlier, so it is already 13 years out of date. That is informing the local plan, which is being discussed with the inspectors is this week. Thirteen years ago, we did not have micromobility, e-scooters and e-bikes. Electric vehicles were not really a thing and bus services were very different. Even our major roads have changed over that time, and we have seen deepening congestion of late.

We now know that climate pressures are bearing heavily on our environment, whether in respect of housing, economic development or transport infrastructure. Anybody who was at the briefing yesterday with Sir Patrick Vallance will understand how pressing it is that we address the climate issue at this moment. Leaving plans for too long could mean that they are not responsive to the call of our time, particularly on climate issues. They will also not recognise the changing environment we are in. I have to hand it to the Government: some of the things they are putting forward on national infrastructure and housing are ambitious. Whether they can deliver is another question altogether, but they are certainly putting out a rapid change, and we need to reflect that in our planning system.

A supplementary plan that is 13 years out of date is not responsive to the logjams that we see in York today—the increase in the volume of traffic and the consequences of that on our air quality—and developments that have happened. We have an outline plan for the York Central site, with 6,500 jobs and 2,500 dwellings. We are talking about placing this new city within York in the middle of our old medieval city, as well as the infrastructure routes feeding into it, but with transport planning that is 13 years out of date, we will rapidly see that bringing all those cars into the city centre will just create a car park. Therefore, it is not responsive enough to the reality of what we are doing. At rush hour, York will come to a complete standstill, yet these supplementary plans are meant to inform what is happening.

I could talk about environmental plans and what is happening on flooding. Fortunately, we have been putting in mitigation to address the flooding challenges in our city, but the Environment Agency tells me that we have 17 years until we are challenged again, unless upstream infrastructure is put in place and we take water out of the rivers, improve soil quality and so on. We really need to think about the rapid changes and pressing issues that we face.

Therefore, we need some time. I put five years as a suggested time period for us to start thinking about how we move on to the next stage of our planning. That is why it is a probing amendment. I am trying to build a culture in our planning system of a thinking process, as opposed to having rigid timetables.

Our major routes around York will have an impact on the way traffic flows in our city, whether it is the dualling of the ring road or the widening of some of the A roads—not in my constituency but on the outside of York. At the same time, we have a city centre that has been declared car-free. That will have a massive impact too, with blue badge holders being locked out of their city. We have changes of routes through various parts of the city, building pressure and volume on some of the core routes through York.

It is important to recognise the pace of the change that is occurring and to think about how we can best address that in the planning system. We can do that through a timetable, and that is why I have said it is a probing amendment. We have to start addressing what is happening on the planet around us in the context of planning. In particular, I am thinking about scheduling and the evolution approach, as opposed to this being an event. It certainly will be an event in York if we do get that local plan over the line. [Laughter.] I am sure the Minister will want to come and celebrate with us all at that moment.

A conversation is needed about planning and about how we bring together our supplementary plans—our minerals and waste plan, and our local transport plan—in sequence for a local plan process. More thinking needs to be done. I thought it was necessary to table an amendment to make that point today and to see how the Minister responds, because this may be something we want to explore at later stages of the Bill.

[Matthew Pennycook]

I congratulate my hon. Friend the Member for York Central on making a strong case for her amendment. The problem she highlights is a very real one—that of out-of-date plans based on out-of-date data and analysis. The Opposition believe that local development plans are vital ways that communities can shape and agree a vision for future development in their area and properly account for the specific housing, employment and infrastructure needs within them. We want to see the proportion of England covered by a local plan increase. We believe it is important that each plan should evolve over time to take into account changing circumstances affecting the area in question, whether it be changes in the level of housing need or new infrastructure requirements.

Paragraph 33 of the national planning policy framework makes it clear that:

“Policies in local plans and spatial development strategies should be reviewed to assess whether they need updating at least once every five years, and should then be updated as necessary.”

I appreciate the argument of my hon. Friend the Member for York Central that this aspect of national guidance should be put on a statutory footing in the Bill. We are certainly sympathetic to that, and I hope the Minister responds to her amendment favourably, with the proviso that, as with so many other measures in the Bill, sufficient resources flow down to local authority planning departments to enable them to carry out a review and an updating exercise at least once every five years, given how onerous a task it is to prepare a local plan or to revise it.

--- Later in debate ---

[Mr Jones]

It is extremely important that local planning authorities ensure that policies in their plans remain up to date, so that they can effectively address the needs of local communities. We have certainly heard one example where the policy is not just out of date; it sounds like it has not been in date for some decades. That causes significant challenges, as has been outlined by the hon. Members for York Central and for Westmorland and Lonsdale.

In the current system, local planning authorities are required to review their plans once every five years from their adoption, as is set out in regulation 10A of the Town and Country Planning (Local Planning) (England) Regulations 2012. We have made it clear in the Bill’s policy paper that we intend to require, through regulations, authorities to update their local plans at least every five years. Although I fully understand the spirit of the amendment, these are procedural matters that have traditionally been addressed via regulations, and we intend to retain that principle. I therefore ask the hon. Member for York Central not to press her amendment to a vote.

[Rachael Maskell]

I am really grateful for the debate and for the Minister’s response. We all recognise the importance of development plans and supplementary plans in shaping our communities. Ultimately, we want the best for our communities and to make sure that providers that have profit in mind do not come and take advantage of an area, which is why such plans are really important. We must ensure that they are timely and kept up to date, and that they are of great use in shaping the future. Therefore, having a process whereby we start to think more about the evolution of our communities, as opposed to five-year or 10-year events that we have to race around to prepare for, is really important.

To get a different culture in planning, we need sufficiency. As my hon. Friend the Member for Greenwich and Woolwich said, we need to ensure that the resourcing is there for local authorities to do a proper job at planning, because if they can build a robust local plan and some of the supplementary plans, it protects them. It also protects their community and enables them to drive change—something I think we all want to see.

As I said, however, I tabled amendment 117 as a probing amendment. I am grateful for the debate. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

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[Greg Smith (Buckingham) (Con)]

I will not take up much of the Committee’s time on this issue, because we have already explored many of the key points that go to the nub of why these two amendments—57, tabled by my right hon. Friend the Member for Chipping Barnet, which I have been happy to sign and support; and 86, in the name of the shadow Minister, the hon. Member for Greenwich and Woolwich—are so essential.

I spoke on Second Reading to say that the Bill was fundamentally good, but that it needed some considerable polishing. This section of the Bill is one of those elements that, in my opinion, just has to change. None of the points I am going to make will come as any surprise to the Minister, given that, up to four days ago, he was my Whip—he has heard it all before. I do not doubt the cartwheels of delight across Nuneaton when the Minister, having been relieved of whipping me, found himself on the Bill Committee, where there are indeed a number of amendments that I have supported or tabled myself.

This group of amendments goes to the heart of whether we are serious about localism and the principles of subsidiary, or whether the default position is still “Whitehall knows best.” There are countless examples of developments across my constituency—this is before I even get on to High Speed 2—where the local council has said no, parish councils and town councils have said no, and the case against them has stacked up with the local plan, be it in the former Wycombe district or the former Aylesbury Vale district. They have even contravened the NPPF.

However, by the time those developments have got to the inspector, the rubber stamp has come down in the opposite direction. As the shadow Minister said, it is already a problem, and I fear that the clause will seek only to bake and lock into the legislation the ability—no matter the cause or the reason and no matter how strongly a community, neighbourhood, parish, town, borough or metropolitan authority feels—of Whitehall to come down and impose a different will on those neighbourhoods and communities.

I give the example of the village of Ickford in my constituency, which is to the very west of Buckinghamshire on the border with Oxfordshire. Every single person in that village knew that that land currently under development floods—not once in a blue moon, but four or five times every autumn and winter. The people who back on to that land know that it floods, because it floods their back gardens, too. The people who drive through that village know that it floods, because the roads flood when that field floods. Locally, that development from Deanfield Homes was turned down because, among other reasons, the land floods. By the time the inspector got his hands on it, it was approved with a peculiar statement that the development had a chance of flooding once every 100 years. Within days of that judgment being passed—guess what? The land had indeed flooded. I know, because I stood in it, and the water lapped up to the top of my Wellington boots.

I give that as an example of why local control and decision making must have primacy in planning, because local people, local councils, local parishes and towns—or whatever tier of local government—actually know what happens in their own back yard. They understand it. They see and feel and breathe and touch the problems that any proposed developments could come across. Therefore, as we look to the summer recess and to coming back in September to finish the Bill’s passage through Committee before it gets to Report, I really urge my hon. Friend the Minister to consider the real implications of baking into the Bill the position that national planning policy can overrule local people’s decision making.

If we are serious about making the Bill truly about localism, we need to seriously amend clause 83. As the great Ronald Reagan once said:

“There is no limit to the amount of good you can do if you don’t care who gets the credit.”

I really do not mind which amendment is chosen, because fundamentally they do the same thing, but I urge the Minister please to reflect on this serious, fundamental point that underpins the Bill and to see if we can find a better way of ensuring that it is local decisions that are made, and not with national overriding.

[Rachael Maskell]

It is a pleasure to follow the hon. Member for Buckingham, and I agree wholeheartedly with his comments. Ultimately the clause comes with an air of arrogance from the Government. I am not looking at the Minister on that as I appreciate he is new in post, but it says to a community, “We, as Government, know best.” I think back to a few years ago, when many of us were involved in the debate about fracking, which was being imposed on our communities. We fought back on those measures. Fracking would clearly have impacted on the environmental and climate situation we are facing. That was a fight from within communities to protect themselves. The communities knew best about the impact that would have.

Levelling-up and Regeneration Bill (Twelfth sitting)

Rachael Maskell Excerpts

Committee stage
Tuesday 12th July 2022 Public Bill Committees

[Mr Jones]

First, I thank the hon. Member for Nottingham North for his very kind welcome. I look forward to working with him and his fellow shadow Minister, the hon. Member for Greenwich and Woolwich, in a good spirit. I suspect that we may not agree on everything as the Bill goes through the House, but I am confident that we will work together with a good spirit, both in Committee and outside.

In response to a couple of the points that have been made, I know that the impact assessment has been a concern. It will be provided shortly, and I would certainly expect that to be the case before the conclusion of the Committee’s proceedings. I hope that we will provide it as soon as we can.

On Wales, we have already given councils the power to apply a 300% premium to properties that have been empty for more than 10 years. That is part of our stepped approach to increasing the level of premium the longer the property remains empty. What we propose strikes the right balance between providing an incentive to bring empty properties back into use while recognising more challenging cases in which owners are taking action to have property suitable for accommodation within that time frame.

I thank the hon. Member for Westmorland and Lonsdale for his kind welcome. I do not disagree with his point about the challenges in many areas, especially those that have a strong tourist economy. I am sure that we will debate those challenges when we come to the next set of amendments. It is good to hear his comments, and that the ministerial team are thinking about that issue.

Question put and agreed to.

Clause 72 accordingly ordered to stand part of the Bill.

Clause 73

Dwellings occupied periodically: England

[Rachael Maskell (York Central) (Lab/Co-op)]

I beg to move amendment 79, in clause 73, page 81, line 30, after “dwelling” insert

“for six months or longer per year”.

This amendment seeks to further define how long a property must be empty for to be described as occupied periodically.

[The Chair]

With this it will be convenient to discuss amendment 80, in clause 73, page 81, line 31, at end insert—

“(c) the occupier declares the dwelling is not their principal residence and there is no tenant in the property for 6 months or longer per year.”

This amendment seeks to provide further definition around the conditions around occupancy.

[Rachael Maskell]

It is a pleasure to see you in the Chair this morning, Mr Hollobone. I welcome the Ministers to their places and wish them well during the consideration of the Bill. We have had a cordial debate so far, but they will hear much about York’s housing crisis, which is a prism through which to look at the Bill as well as an important case study to help the Government understand the real challenges we face.

The amendments highlight that some properties are occupied on a part-time basis only. They are let as short-term holiday lets from time to time, perhaps not consistently, or may be empty for periods and utilised some of the time. We all recognise from our constituencies that some properties have different patterns of occupation, so that they are not always empty, but are not fully occupied either. The challenge is that that can remove opportunities for people who desperately need a home.

The amendments seek to define a period of vacancy and reduce it from a year to six months. It is reasonable to expect a property owner to visit the property every six months. A longer period would raise questions of whether they in fact reside there. I am aware of circumstances in which people have families overseas, for instance, and may make extended visits to see them. I would not want to penalise people because their life journey and responsibilities differ from mine, but if they do not visit a property for six months we can conclude, under the definitions in the clause, that it is an empty dwelling.

This is an important issue, because empty homes, especially during a period of inclement weather, can impact on neighbouring properties. Gardens can become unwieldy and overgrown in less than six months, which can impact on the morale of the neighbourhood and on house prices. I can point to many such examples in my constituency. In fact, a resident called me into her garden in Tang Hall on Sunday and showed me the consequences of a home being neglected for a period of around six months. The brambles were about 6 feet high and encroaching on her garden space. These things really matter to neighbourhoods. Neglected properties can also spread damp to each other, which is another concern for neighbours.

Neglected properties should attract an uplift in council tax. Having clearer and shorter parameters by which councils have permission to operate an increase in council tax enables councils to make better decisions, as well as generating revenue for the council. I would therefore like to focus on my amendments in order to achieve that. I have further amendments that I will dwell on shortly, but the reason that this amendment is so important for communities such as mine is that we are increasingly seeing properties being developed not for occupation, but for asset. We will return to that theme on numerous occasions throughout the debate.

We can see around us the new developments in London. We are also increasingly seeing that situation in York, where there may be one or two occupancies in luxury apartment buildings, but nobody has ever moved into many of the units. They are literally just investments for people in the UK or overseas. Residents in my city who are desperate to get on the property ladder and have a home know that there are dormant units within their community, and they are significantly concerned about the implications.

I will talk further about this issue, but I am putting the Minister on alert about the York Central site, which he will certainly get to know over the coming days. We have a 45-hectare brownfield site—the biggest brownfield site in Europe—yet our council sees the development of luxury apartments that no one will live in as its priority, as opposed to the site being used for homes for local people, and for economic space, which would be the best use for it. Indeed, Homes England has identified that the whole area could well turn into Airbnbs. We know that York already has around 2,000, so this is a serious encroachment on future housing use. Therefore, we do not want to see lip service paid to these measures; we want to ensure that we have the right measures in statute to protect our community and give them the opportunity to have a home.

[Alex Norris]

Clause 73 has much in common with clause 72 and, again, we are minded to support it when we get to the stand part debate. I congratulate my hon. Friend the Member for York Central on her efforts to improve the clause, which amendments 79 and 80 certainly would do.

Clause 73 deals with the second home premium. In the light of the housing crisis, as discussed in the previous stand part debate, it is right that we seek to deal with this issue. It is a serious gap in the legislation that billing authorities can currently levy the empty homes premium only on homes that are unoccupied and substantially unfurnished, which could leave out a significant number of dwellings as well as leaving the edge cases to be defined via case law, rather than in statute. It obviously leaves a big gap where there is no permanent occupant but the property is furnished and habitable, allowing the skirting of the empty homes premium in its entirety.

It is right that we seek a second homes premium—as I say, we will support the Government in that venture—but it is also right to try to tighten up the measure on the face of the Bill, as my hon. Friend has sought to do, by drawing a line in the sand at six months’ occupation of the property. This is about seeking a balance between the individual and the broader society, which is always—certainly at its edges—a hard thing to do and to define, because it is right that people are allowed the peaceful enjoyment of their property in the way they see fit. As my hon. Friend said, it is right that we understand that people have different lives, and we in this room know that as well as anybody else. We genuinely spend our week split between two different places, and a one-size-fits-all approach will not work.

As my hon. Friend said, we also have to understand the impact that properties that are long-term vacant and only notionally lived in can have on a community, including the detrimental effect of overgrown places on amenity, problems caused by burst pipes, and antisocial behaviour targeting empty houses. Those effects are frustrating for communities. When we set that problem against the fact that people are crying out for properties, it is clear that a balance must be struck. We are glad that the Government have started to address the problem, but my hon. Friend’s amendments would improve the Bill, and I hope that the Minister will accept them.

--- Later in debate ---

[Mr Jones]

I thank the hon. Member for York Central for her kind welcome to the Committee. It sounds as though I am likely to hear a great deal about York Central—somewhere I am not a stranger to, having been there to present a high streets award to Bishy Road some years ago, in the dim and distant past when I was last a Minister in this Department.

The Government’s proposal for a second homes premium makes clear the situations in which a council may quite properly apply a premium. Those situations are, first, that a property is substantially furnished—distinguishing it from empty property dwellings that may more properly be subject to the empty homes premium—and secondly, that there must be no resident of the property. For the purposes of council tax, a resident is someone who has their sole or main residence in the dwelling. In that case, the resident would pay the council tax normally due on that dwelling as essentially it would be their main home. They would not be subject to a premium as it is their sole or main residence.

Owners of second homes may well occupy those properties during the course of the year, and how much use they make of them will vary depending on circumstances. It may be that the hon. Member’s amendment is to enable the premium to be applied only when the homeowner does not use the property for more than six months a year. If that is the case, it might be helpful to set out how councils already determine what is and is not a second home.

Councils already make judgments as to whether an individual’s property is their sole or main residence and, by default, what might be a second home. That is because they want to be satisfied that any discounts or exemptions are applied correctly and to the right property. In making a judgment on whether a property is a sole or main residence, councils will reflect on legislation and case law and take into account a range of factors including where the person is registered with a doctor, where they are registered to vote and the occupancy of the property.

Given those established processes for assessing what is a second home, I do not believe that a further restriction on the definition of properties that may be subject to a premium is needed. In addition, the assessment of whether a property is a second home will take into account a number of factors and not just the period of occupation. A reference to the number of days may well preclude treatment of the property as a second home when other factors suggest that, in effect, it is being used as a second home. The amendment could result in a reduction in the number of second homes liable for the premium.

Amendment 80 would mean that, where the property has a tenant for more than six months, the premium would not apply. Council tax is usually paid by the occupants of the property and, in cases where a tenant is occupying the property as their sole or main residence, the tenant would be liable for that council tax, not the property owner. Therefore, no premium would be due.

The premium is not aimed at properties that are let out to a tenant as they will be somebody’s sole or main residence. It is right that a second homes premium should not apply to such properties. With those clarifications, I hope the hon. Member will agree to withdraw her amendment.

[Rachael Maskell]

I appreciate the considerations given in this debate, and I am sure that the Minister, knowing Bishy Road, will look forward to getting to know other parts of York. He made an interesting point about the definition of a second home. Later we will look at some of those issues, which our constituents are rightly asking about, because when people do not have homes, they ask a lot of questions about housing. Questions are being asked in particular about unoccupied dwellings, which we are considering here.

The shadow Minister, my hon. Friend the Member for Nottingham North, was right to highlight the fact that many empty dwellings can be targets for antisocial behaviour. In drawing out that important point, he also set out the reason to focus on that and disincentivise it. Empty dwelling management orders can be used effectively. Newham Council is probably the local authority that has used them to best effect, by taking properties and turning them into social housing. However, the legislation is clunky and the processes are slow. I would welcome it if we looked at how to use that legislation. In the light of this debate and those to come, I beg to ask leave to withdraw the amendment. I am sure that we will return to this issue.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 82, in clause 73, page 82, line 14, at end insert—

“(10) The Secretary of State must by regulations make provision for and about offences punishable by a fine for people who submit misleading, inaccurate or incomplete information to a billing authority in relation to the occupancy of their dwelling.”

This amendment would provide for fines to be issued to those who fail to provide correct and accurate information regarding the occupancy of their dwellings as an anti-fraud measure.

I will be brief in my comments about this amendment because I think it speaks for itself. My amendment is not particularly about local authorities being vexatious in proposing to use levers to ensure that properties are properly recorded—I am sure that many owners will find it hard to distinguish whether properties are second homes, an empty dwelling and so on. Clarity is needed, and registering properties for the purposes of paying the right level of council tax will benefit the whole community, because the more revenue councils have, the more they can do.

This simple amendment would provide local authorities with an additional lever to incentivise people to declare their property in the right category, to ensure that they are not misleading the authority, and that the information is accurate and complete. It would make the billing authority’s life easier and enable it to recover not only the expected costs, but the additional costs if the information had previously been wrong. The amendment is about local authorities recovering additional revenue, rather than making additional expenditure, as well as acting as a lever for people to correctly register their property.

[Alex Norris]

As we can tell from the discussions so far about clauses 72 and 73, legislating in this space gets fiddly. Previously, it has been easy to skirt the empty homes premium by having a “substantially furnished” residence, and what constituted “substantially” was left to the courts. It is good that we are seeking to tighten things in this space.

In making the case for proposed new section 11C(2)(b) of the Local Government Finance Act 1992, the Minister gave a helpful explanation of how it will address that challenge, which is a really good thing. I am more worried about proposed new subsection (2)(a) and the concept of “no resident”. Again, the Minister entered into this space with some of the tools that local authorities will be able to use. I am not sure about data registration; if people were minded to try to skirt these regulations, that test would likely be easy to pass without breaking any laws. He mentioned access to healthcare, which would be a better tool. Will he expand on some of the other ways in which local authorities would be expected to establish when a home is genuinely a second home? My fear is that by closing one loophole we may create another one, particularly one that is undefined in statute, as the Minister did not accept the opportunity provided by amendments 79 and 80 to give a clearer definition.

Legal action is unlikely to be a good risk-reward proposition for local authorities. In general, the clause as constituted offers them a chance to basically double council tax on those properties, which would be in the order of £1,000 to £2,000 a year on a normal property. That is not a great incentive for local authorities to chase.

As my hon. Friend the Member for York Central said, the amendment’s importance is not about vexatious regimes or councils being overbearing and entering this space too much. Similarly, the amendment would not require individuals or families to take expensive advice in order to comply with the regulations and know whether they ought to be paying a long-term or second home premium, or neither. The arrangements should be fair and candid, and should be sufficient to guide them to pay—or not pay—in the way that they ought to.

The amendment would provide a second disbenefit to those who might seek to work around the legislation. At the moment, if it is a risk-reward proposition for an individual, then perhaps that amount of money is worth a bit more to them, set against the fact that local authorities might not be minded to pursue them. There must be clarity on the face of the Bill, and in the follow-up regulations, that this is a serious matter, as the amendment specifies, and that the Government look dimly on those who seek to circumvent and evade the regulations by not making a fair and candid assessment. It must be made clear that that is a bad thing, that it is looked upon dimly, and that there is a proper punishment regime that lies alongside that, to provide an extra disincentive to those who seek to work around the rules.

--- Later in debate ---

[Mr Jones]

I thank the hon. Member for York Central for the thought that has gone in to her amendment. I am sure we all agree about the importance of ensuring that people play by the rules and provide accurate information to allow councils to issue the correct council tax bills, and also that when people do not do the right thing, councils can take the appropriate steps.

The proposed amendments would require the Secretary of State to make regulations to create new offences, punishable by a fine, in relation to the submission of occupancy information. I completely understand the objectives of such a measure. However, I assure the hon. Member that existing powers already enable councils to take appropriate action where there is evidence that the individual has taken steps to avoid payment of the premium. The Local Government Finance Act 1992 already provides powers for councils to issue penalties to a person who fails to provide information requested to identify who is liable for council tax on a dwelling, or knowingly supplies information that is inaccurate. In addition, where false representation is made dishonestly for gain, the Fraud Act 2006 may well apply.

I share the hon. Member’s concerns about ensuring that evidence of wrongdoing is tackled and that councils have appropriate powers, and I have described those that already exist. However, if we do become aware of evidence of an underlying problem that cannot be covered by the powers that I have set out, the Secretary of State does have powers to make regulations to create powers for councils to require information and to create offences for a failure to provide information or for providing false information. We have already used those powers in connection with information for local council tax support schemes. We would be able to use them again if evidence were provided that the application of the premium was being frustrated by misinformation that could not be tackled by the existing powers. I trust that, with the assurances that I have described, the hon. Member for York Central will withdraw her amendment.

[Rachael Maskell]

I am grateful to the Minister for setting out the measures that are already available to local authorities, in particular under the Local Government Finance Act 1992 and the Fraud Act 2006, and the opportunity to exercise those powers in relation to this set of circumstances. The advice to all people seeking to register their property is to ask for advice from the local authority to ensure that their property is within the right council tax band, and there would then be no need for such measures.

However, the hon. Member for Westmorland and Lonsdale is absolutely right when he talks about loopholes: I have no doubt that individuals will be examining the Bill for such loopholes to exploit. Our responsibility is to close loopholes as we debate the legislation, because we do not want to be back discussing the same measures, when we had the opportunity to bring about change. However, I am satisfied with what the Minister has set out today, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Rachael Maskell]

I beg to move amendment 83, in clause 73, page 82, line 28, at end insert—

“(3A) The Secretary of State must by regulations make provision to ensure that that, where a dwelling is occupied periodically as the result of a bereavement, higher council tax is not charged for at least two years.”

This amendment would extend the period of time people would have to make arrangements for their property following a bereavement.

[The Chair]

With this it will be convenient to discuss amendment 84, in clause 73, page 82, line 28, at end insert—

“(3A) The Secretary of State must by regulations make provision—

(a) to ensure that that, where a dwelling is occupied periodically as the result of dilapidation, the higher rate of council tax is not charged for at least one year from the change in ownership of the property, and

(b) about appeals against determinations under this section.”

This amendment would give owners of dilapidated properties up to a year after acquiring the property to refurbish before additional council tax rates are incurred.

[Rachael Maskell]

These would be important amendments to the legislation. We have talked about the categorisation of dwellings and whether they are occupied, but we are all aware of circumstances in our constituencies where people are not occupying a dwelling. Amendment 83 in particular is one of compassion, to recognise that if individuals have had a bereavement—typically, that would be of parents, but it might be a child or another relative—part of their grieving process is clearing the house and seeking how best to honour the deceased in the disposal of goods and in ensuring that the disposal of the property itself is in good order and respectful. It can take time for people to go through the memories and the grieving process, especially if they live some distance away or have a job. It can be challenging.

I am sure that we can relate to such circumstances. Therefore, allowing time for that to be gone through—I suggest a period of two years—enables the process to be done with dignity, as opposed to what we often see with people who have to clear out social housing. Literally, I have had cases of notices dropping through the door before the deceased has even been buried. I have had that fight locally about ensuring that we respect the dignity of the family and their needs.

The amendment would build compassion into the clause, being generous in the time that it gives people before recognising that a house is no longer occupied. In particular during covid, it has been challenging for people to empty properties so that they can put them on the market and sell them. There can be extenuating circumstances in which the measure may apply.

Moving on to amendment 84, I recognise that bringing old, dilapidated buildings back into use can benefit the whole community and individuals. Taking time to do that is important, to get it right. I grew up on a building site, with a DIY father. I think the whole of my upbringing was on a building site—it takes time to do up an old property or extend it. I lived on a building site, though many people move out. I am talking about people moving in order to focus on getting a roof on a house, putting in walls or doing essential renovation to bring the property into good use. Therefore, the amendment recognises that there are circumstances when dwellings will be unoccupied and unfurnished for work to be done. It encourages people to bring properties back into use, without having to pay higher rates of council tax.

I trust the Minister will understand the sentiment behind both amendments, and will recognise that they are sensible ways of dealing with some practical and sensitive issues that, if they are not dealt with in Committee or later in the passage of the Bill, will be raised by residents with their local authorities.

[Alex Norris]

I congratulate my hon. Friend on these amendments. There is a certain amount of prescience to them, given when they were tabled. When we debated clause 72, the previous Minister, the hon. Member for Harborough, raised a concern that some of my amendments would inadvertently sweep up families that were suffering bereavement, and these amendments are a prescient way of avoiding that.

For all the reasons my hon. Friend the Member for York Central set out, we recognise that sorting estates, untangling and consolidating finances, applying for probate, and even selling a property, can be a long and arduous process that is set against and alongside the grief that families feel when they lose someone. That makes it really hard, and then, as my hon. Friend said, we have to factor in distance and work responsibilities, and I would add caring responsibilities, so it is right that we build as much compassion and understanding into the system as possible. It feels like the two years is a good way of doing that. I note that it is an “at least” period, so there could be plenty of room for understanding from the local authority if, say, at the end of two years, the property had not been sold yet, or was sold subject to contract—certainly if there is a chain, it can take a long time. There is plenty of room in the amendment to ensure that families that have suffered are not caught up in ways that are unfair, unkind and not how the Bill is designed.

On amendment 84, last Tuesday the then Minister raised a similar concern about dilapidated properties that are being done up. Again, this amendment, which was tabled before that debate, is prescient in that regard. It is again an “at least” provision, which means that local authorities could be thoughtful about delays to work because of all sorts of things, including planning concerns and the weather—significant events that can set development back—and the long process of sale. These amendments would put on the face of the Bill some understanding, humanity and common sense, and would ensure that the balance is struck and that the Bill does what it is seeking to do.

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[Mr Jones]

I will deal with the two amendments in turn. With amendment 83, the hon. Member for York Central’s desire is to ensure that those people who inherit property are not unduly penalised by the rapid imposition of a second homes premium. I will set out what happens with council tax liability when the owner of a property passes away and leaves it empty. Such a property is exempt from council tax as long as it remains unoccupied and until probate is granted. Following a grant of probate, a further six-month exemption can be provided, so long as the property remains unoccupied and the ownership has not been transferred. There are already strong protections in place.

Amendment 83 proposes that in addition to those protections, the property should be exempt from any potential second homes premium for a period of at least two years. A premium would only apply if the property was not someone’s sole or main residence, and if it was furnished. I understand the hon. Member for York Central’s concern. I hope that she will be reassured that the Bill includes powers for the Secretary of State to make regulations that exempt certain classes of property from application of the premium. We will reflect on the points that she made and consider whether to consult on potential exemptions to the premium.

Amendment 84 appears to suggest that someone purchasing a second home that requires some improvement should be able to benefit from an exemption for at least one year. While I fully support homeowners investing in their main or second homes by renovating and improving them, I am unclear as to why such work on second homes should benefit from an exemption to the premium. The premium would only apply if a property was furnished. If it required substantial rebuilding work, it seems unlikely that the property would be furnished. In that case, a second homes premium would not be due in any case since the property would not meet the definition in the Bill.

[Rachael Maskell]

I am grateful to the Minister for the points he is making. It is possible to be in a situation where part of the property was furnished because that is not the area where dilapidation has occurred, but part of it is unfurnished because it needs, for example, a new roof or an extension. There is a situation where there is furnishing, but the property is still unoccupied due to renovation work.

[Mr Jones]

The hon. Lady raises an interesting point. It seems clear to me that that property would be partly furnished, but not be occupied by the owner. It would therefore still constitute a second home—that is the argument I am making.

On amendment 84, the hon. Lady gave the example of the roof not being on a property. If a property were not in a fit state for habitation and required substantial work to bring it into a reasonable state, it is quite possible that the Valuation Office Agency would consider a request to remove the property from the council tax list, thereby removing its liability for council tax.

I hope I have been able to clarify my understanding of amendment 84, and I hope that with my reassurances the hon. Lady will withdraw both her amendments.

[Rachael Maskell]

I welcome the debate we have just had. For the record, I think it is important that we take forward discussions around these issues and understand the challenges our constituents in sensitive circumstances are facing. The Minister’s response on the powers that local authorities already have until probate is granted was helpful and gives us the opportunity to reflect on that issue. It would be my sincere hope that local authorities will be able to work with families who are bereaved to give them the support they need to dispose of a property in a timely way.

On the dilapidation of properties, the hon. Member for Westmorland and Lonsdale was absolutely right to highlight some of the workforce challenges currently facing the construction industry. We know the Government are making many demands on that depleted workforce, which is taking time to recover and has many challenges pressing down on it. We simply do not have the labour supply to address the multiple demands being placed on construction and maintenance. Even the timescales I suggested in the amendment could be challenged due to that demand on the industry.

The Minister’s comments on the role the Valuation Office Agency can play in removing a property from the council tax list during a period of renovation were quite helpful. I am sure they will be well heard by people in those circumstances, but I think I am perhaps just scarred from growing up in a property where we had a tarpaulin roof for many a winter, and living under it posed real challenges. The suggestions the Minister has made and the direction he has shown through his comments to the Committee have been helpful. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

[Mr Jones]

Clause 73 contains a power for councils to introduce a council tax premium on second homes. We recognise that second homes can benefit local economies and the tourism sector. Second homes can also provide flexibility to enable people to work in and contribute to the local community, while being able to return to a family home in another part of the country on a regular basis. However, the Government understand the concerns that large numbers of second homes, particularly where they are concentrated in a small area, can have a negative effect on the vitality and viability of local communities.

A large number of second homes impacts on the size of the permanent population who help to generate the demand needed for their local services the year round. It creates a hollowing-out effect. The local schools have insufficient pupils to remain open. The local buses do not have enough passengers to maintain the service. The village pubs and post offices do not have the customers to sustain them through the year. These are all arguments that many Members are familiar with and have made to the Government.

The risk is clear that, without action, some communities will become increasingly unviable as local services close due to a lack of a permanent year-round population. The Government are not prepared to stand by and watch that happen. We are investing £11.5 billion in the affordable homes programme, which will deliver up to 180,000 affordable homes.

We have introduced a higher level of stamp duty on the purchase of second homes. The clause supports that by providing new powers for councils to apply a premium of up to 100% extra council tax on second homes. The use of that premium will be discretionary, and it will be for councils to exercise their own judgment as to whether to apply a premium and at what level—up to a maximum of 100%. The premium will provide councils with the flexibility to access additional revenue. It will be for councils to decide how best to use this funding. For example, councils may choose to support the local shop or village pub, or they may invest it in new affordable housing for local families, so they can help maintain the lifeblood of their community.

We are clear that second home owners should be given sufficient notice of the introduction of a premium. The clause will require each council introducing a premium to have a minimum period of 12 months between making its first determination and the financial year in which it takes effect. That will give second home owners plenty of time to make plans for how to respond to the forthcoming premium. Of course, there may be circumstances where it is not appropriate to apply a premium. Proposed new section 11D(1) provides a power for the Secretary of State to make regulations prescribing categories of dwelling in relation to which the council tax premium on second homes cannot be charged. We will consult on such categories.

Proposed new section 11D(3) includes a power for the Secretary of State to vary the maximum council tax premium that can be charged on second homes. It is clearly sensible to maintain a degree of flexibility for the future. If circumstances suggest that consideration should be given to adjusting the level, any consequent regulations will be made through the affirmative resolution procedure and will require approval of this House. The power contained in the clause will enable every council to decide whether to apply a premium at a level that is suitable for their own circumstances. It will enable them to generate additional revenue, and they will be able to use it to mitigate the impact of high levels of second homes in their areas. I commend the clause to the Committee.

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[Mr Jones]

I nearly thought that that the hon. Member for Westmorland and Lonsdale was going to cross the Floor, given his glowing praise of my analysis. I understand his concerns. That is why we have, over time, put in place a number of policies, including increased stamp duty for purchases of second dwellings, and why the Bill introduces a council tax premium. Clearly, there is a wider picture, and we understand that picture. It is a complex issue and we constantly look at it.

The hon. Member for Nottingham North is concerned about the Secretary of State’s involvement. I do not want to pre-empt the result of the consultation, but it might include the points that he has made about probate. I expect the consultation to take place this autumn, and I hope he will look carefully at it and respond to it.

Question put and agreed to.

Clause 73 accordingly ordered to stand part of the Bill.

Clause 74

Alteration of street names: England

[Rachael Maskell]

I beg to move amendment 85, in clause 74, page 83, line 23, at end insert—

“and it has considered the historical, cultural or archaeological significance of a name change”.

This amendment requires cultural, historical and archaeological factors to be considered before making a name change.

We are considering many things in the Bill, and we come now to a clause that deals with street names. Needless to say, the issue of street names is one of much interest not only to the population of York at large but to archaeologists and historians, whom I meet regularly in our city. It is probably obvious why that is the case: we are clearly a proud city and there is much history to be debated.

A lot of streets in York have changed their name over time. A case could be made to change some of them back to their original names. In York, the streets are named gates, the gates are called bars, and the bars are called pubs. Our language is slightly different from that used in other places. Many of the names have been changed for good, sensitive reasons. What was Beggargate, for instance, is now called Nunnery Lane, and some names were far worse. Our approach to the naming of streets evolves. We have many layers of history, and there are areas of Roman, Viking and medieval significance in places such as York.

Names could be changed at the stroke of a vote, but it is important to put in place checks and balances, including a consultation process and engagement with the wider community stakeholders and residents, to ensure that streets have appropriate names.

There are examples of those who were once heroes but are now fallen individuals. We may have seen a darker side of them or of our colonial past. The street name can tell a different story and therefore the changing of a name is not only a process but can be a historical or political act in itself. It may be desirable, but to understand the past is important. Therefore, to explain the name rather than change it may be the action to take to reflect that on a newer estate. Perhaps we will look at the industrial past of an area or some event or place of significance, or perhaps point to a new age and opportunity.

There are countless reasons why a street name vote may be sought. However, recognising the significance of a name or a former name could help define a street or an area, as well as the historical, cultural or archaeological significance of a place. My amendment will simply ensure that the history and archaeological understanding of a place is not lost. I am seeking assurances from the Minister that that understanding will form part of a consultation around the name change and the process set out in clause 74.

[Alex Norris]

This is the third time in part 2 that we have addressed names. We addressed alternative names for Mayors and alternative names for combined county authorities. My view on street names is the same as in those cases. My experience in Nottingham is that if we seek to do anything daft with names, the public pretty soon sniff it out and have a good way of correcting it, whether at the ballot box or through more informal means. I have a lot of confidence in our communities to make the right and sensible decisions given the right framework in law.

We are interested in the clause. I may make some more arguments in the next amendments. It is important that the important historical and archaeological factors are not lost. This is probably a de minimis provision and only asks for consideration. It is no greater fetter than that. I hope the Minister is minded to that.

[Mr Jones]

The amendment would add additional criteria for local authorities when considering the renaming of a street. I understand the importance of history, archaeology and culture in this process. However, the Government strongly believe that local people should have the final say on changes affecting street names. We would expect those local views to reflect the historical or cultural associations of the names concerned, and the importance that communities place on them. It is not clear that a freestanding additional requirement to consider heritage is necessary, or how it would work. It could, for example, make it harder to secure name changes that have local support but where new considerations, such as the need to honour a local person or event, take precedence over an archaeological interest. For instance, some Olympians had streets named after them following the 2012 Olympics.

We recently consulted on the prospective secondary legislation and guidance to deliver those changes. Respondents were overwhelmingly positive about our proposals, with 91% agreeing that the regulations and statutory guidance should set out how local authorities should seek consent when changing a street name. In view of that support, and the fact that heritage and cultural significance are matters that communities will weigh up, I hope the hon. Member will withdraw her amendment.

[Rachael Maskell]

I thank the Minister for his comments. My hon. Friend the Member for Nottingham North is right to highlight how our residents will do the right thing and we can depend on people to make the right choices, as I am sure they will in York. It is important to hear the Minister’s comment on the record that he will expect residents to reflect on the historical and cultural aspects of their streets and communities. People wanting to honour people or events of note in their communities will have the opportunity.

It is also important to recognise the place-making ability of a vicinity—for example, if there are quarters in a place, certainly in places as historical as York—to ensure that there is an ambience, an identity, given to a place. That could impact on the tourist aspect and the economic opportunity of a place, as well as the name in itself. I am sure there will always be streets in which to honour local individuals and at the same time balance the cultural sensitivities of an area. I found the Minister’s remarks helpful; I put that on the record. I think it will help with the next discussion, so I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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I do not think that we are at cross-purposes with what the Minister is seeking to achieve, but in this instance the Government are too rigid. I hope that we will hear that common sense will be applied to make the provision a little more user-friendly.

[Rachael Maskell]

I support the amendments, particularly in the light of my withdrawing amendment 85. I believe that what sits at the heart of the clause is proper consultation with community stakeholders, whether they are residents, businesses or wider stakeholders, for instance Historic England, or the city archaeologist in the example I cited. The process of consultation is of key significance, and I am grateful to my hon. Friend for Nottingham North for setting out in such detail the type of proper consultation that should be embarked on.

I think we can all recall the naming process of the research boat Boaty McBoatface, and there has certainly been learning from that experience about what could happen with a renaming process. I speak as someone who has a street in my constituency called Whip-Ma-Whop-Ma-Gate, which means neither one thing nor the other—in itself curious. Names can be curious, but a rigorous consultation that can flush out the issues could avoid those significant pieces of amusement, ensure that the proper voices are heard and confirm a sensible place name. A name is not just a name; it is an identity. We all think about the addresses we have lived at, and the identity they have given us, so it is important that people have ownership. A thorough consultation by a good local authority is what my hon. Friend seeks through his amendment.

On the consultation exercise, although the digitalisation of processes is welcome, I emphasise how important it is that signs are still placed on street corners, as proposed in amendment 71. People in the community need to know what is happening. It is not an either/or; it is a both. People should be able to engage with a physical notice. We all see signs up across our constituencies and stop to read them, because they are an important indicator of how people can get involved. I urge the Government to consider the breadth of that opportunity.

Finally, I highlight my hon. Friend’s points about referendums. We know that they have costs attached, and a referendum on a street name would place an additional cost on a local authority at a time when resources are thin. Given the time and complexity involved, is that really the right focus for the Government, when a consultation could do the job by utilising the existing democratic process through elected councillors? I trust that the Minister will reflect on the realities of the clause when alternative routes, as my hon. Friend set out, could strengthen the process and enable the right outcome.

[Mr Jones]

The Government are strongly of the belief that people should have the final say on the character of the area in which they live. That must include protecting their local heritage. In this context, I agree with the underlying intent behind the amendments. There should be clear processes for making sure that local views on proposed street name changes are taken into account. It is, however, important that we do this in the right way, so that the processes are robust, but can be adjusted if required.

The Government recently consulted on the prospective secondary legislation and guidance to deliver the reform to street naming set out in the Bill. Respondents were overwhelmingly in favour of the proposals set out in the consultation, with 91% agreeing that regulations or statutory guidance should set out how local authorities should seek consent when changing a street name.

The amendments would remove the Government’s ability to do that and replace it with less specific requirements than we intend. I reassure the hon. Member for Nottingham North that we will be setting out clear, transparent and robust arrangements in secondary legislation. As I said, a significant number of respondents to the consultation want a proper say, and we can understand why. If the name of a residential street was changed, for example, individuals in any particular property would face significant costs from amending the title of their property or the addresses on their car logbook, bank accounts, utility bills, driving licence, and a number of other things that we could all reel off. Such things are important considerations, and that is why we are setting out down our chosen path.

By setting out the detail for how consultation on street naming will work in regulations and guidance, we will maintain flexibility to update processes in line with changes in circumstances, such as new technology. With that explanation, and those assurances, I hope the hon. Member will be willing to withdraw the amendment.