Examination of Witnesses

Growth and Infrastructure Bill – in a Public Bill Committee am 8:59 am ar 13 Tachwedd 2012.

Danfonwch hysbysiad imi am ddadleuon fel hyn

The right hon. Michael Fallon MP, Nick Boles MP and the righthon. Gregory Barker MP gave evidence.

Q 1

Photo of George Howarth George Howarth Llafur, Knowsley

We will now hear oral evidence from Ministers from the Department for Business, Innovation and Skills, the Department for Communities and Local Government and the Department of Energy and Climate Change.

I understand that the Ministers have brief opening statements to make. It would be helpful if we do that now. I leave it to you which order you go in.

The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): I welcome the opportunity to set out the case for the Bill at the outset of these evidence sessions, and I look forward to the opportunity to hear the views of the witnesses who will appear over the first four of our sittings. We will then come to the detailed consideration of the clauses, and I am sure that the Committee will, under your chairmanship, Mr Howarth, provide valuable scrutiny. I draw the Committee’s attention to the impact assessment that was published yesterday, which covered all the clauses, with the exception of clause 23. That will be published following the analysis of the consultation that closed last Thursday.

We have only one hour available to us, so I propose that we concentrate on the following areas: my hon. Friend the planning Minister will draw the Committee’s attention to key evidence in support of the planning provisions, focusing on clauses 1, 4, 5 and 21. The Minister of State for Energy and Climate Change will speak to clauses 15 to 18 and I will cover clauses 7, 11 to 14, 22 and 23. That should enable us to cover the main areas of the Second Reading debate.

The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): I look forward to serving under your chairmanship, Mr Howarth, and to the lively debate we will have on the Bill.

The Government devolved an unprecedented level of power to local authorities in the Localism Act 2011. With power must come responsibility, and the overarching aim of the Bill’s planning measures is to ensure that all councils take responsibility for making decisions on behalf of their communities. I am glad to say that the vast majority of authorities do a fantastic job of taking that responsibility and exercise their powers wisely. That is why the country’s local planning authorities, between them, made 435,000 planning application decisions in 2011-12, of which 87%—a 10-year high—were granted.

In clause 1 we are trying to tackle the issue of the few local authorities that accept the power, but refuse to exercise responsibility. We are therefore looking at local authorities that take too long to make decisions, or make decisions that do not accord with their policies and with the simplified national policies in the national planning policy framework. Over the past four years, the proportion of major applications determined within the statutory time scale of 13 weeks fell from 71% to 58%. That is troubling. It is not due to an increase in work load, as there has been a corresponding decline of 18% in the number of decisions. Last year, more than one fifth of decisions on major applications took more than 26 weeks. That is more than twice the statutory requirement. More striking still, one in 10 major application decisions took more than a year, and 43% of planning appeals involving major development succeeded—that is, they were overturned by the Planning Inspectorate as not being in accordance with local and national policies.

Some have argued that the deterioration in performance is due to reduced funding for local government, but we have lots of evidence of local authorities improving their performance on major applications. Between September 2010 and October 2011, Surrey Heath increased the proportion of major applications decided within 13 weeks from 42% to 100%. In case anyone thinks that I am singling out fantastic Tory areas, Coventry has improved its performance on the same measure from 54% to 98%. It is clearly possible to do a good job.

The impact of delays is also clear. In 2010, in a report for my Department, Professor Ball of the University of Reading estimated that the transaction costs of development control for major residential development may be up to £3 billion a year. In a recent evidence session to the Select Committee for Communities and Local Government, the same professor advised that the actual costs are likely to be higher than that. Of course, Mr Howarth, you will remember that the previous Government commissioned Kate Barker to do a study into housing and the planning system. She made it clear that unnecessary delays imposed significant costs on the economy.

A survey from the Federation of Small Businesses revealed that seven in 10 of small businesses have to wait more than the maximum eight weeks allowed by Ministers for local authorities to decide most planning applications. Less than a third of all applications were decided within the allocated time frame. Evidence from the quarterly survey of home builders conducted by the Home Builders Federation showed that planning delays have been consistently cited as one of the most significant constraints on home building. In June 2012, 77% of respondents considered planning delays a major constraint. Delays are bad for business, bad for communities and bad for growth. That is why, while supporting local  authorities that do a good job and take responsibility, we are acting to ensure that those who do not are brought up to the mark.

I now move to clause 4 and information requirements. Although it did not attract much attention on Second Reading, in my view it is perhaps the provision that will make the most positive impact to the planning system and the speed of development. There is a longstanding issue with the proportionality of the information requirements, which can cause delays before an application is even validated. Case study research carried out as part of the Killian Pretty review found that almost half of the cases surveyed had problems with the registration procedure, with 20% reporting substantial problems causing delay and exhibiting poor practice.

In our recent consultation on information requirements, almost four in five respondents supported stronger scrutiny of the local lists of information requests prepared by councils, with many, including the National Farmers Union, the Home Builders Federation and the Royal Institute of British Architects arguing strongly that greater rights to challenge information requests are needed. A single archaeological report can cost £4,000 to produce, and there are often requests for multiple reports to be prepared, the cost of which taken together can make it unviable to progress a development at all. A medium-sized development could be asked to produce up to 10 different reports or surveys. A major difficulty for applicants is that those costs are often front-loaded in a development process, particularly when they are incurred at outline application stage.

Photo of George Howarth George Howarth Llafur, Knowsley

Order. The timetable for these sessions is very tight. I am sure that the Minister is now bringing his remarks to a close so that we can get his colleagues in and complete the business.

Nick Boles: I am very happy to bring my remarks on clause 4 to a close. I had been going to provide some evidence on clause 5, as well as on clause 21 on major infrastructure, but if you would rather that I did not, Mr Howarth, I am always happy to accede to the Committee’s requests.

Photo of George Howarth George Howarth Llafur, Knowsley

I hope that members of the Committee will take the opportunity to note the points that the Minister has not been able to cover and bring them up in questions, which hopefully will give him the opportunity to say what he needs to say.

The Minister of State, Department of Energy and Climate Change (Gregory Barker): Thank you very much for inviting DECC to give evidence on the Growth and Infrastructure Bill, Mr Howarth. I hope your Committee will agree that clauses 15 to 18, although largely technical, are sensible improvements to legislation that will have a positive impact on energy infrastructure. The reasoning behind the clauses is that currently developers of power stations can be held back from improving their plans because they have no way to easily vary consents. For instance, if a developer wants to incorporate the most recent, up to date technology and design to increase energy efficiency, they could be prevented from doing so, which means that in reality developers can be prevented from being as ambitious and innovative as they and we would like.

An amendment to the Electricity Act 1989 will mean that if developers want to apply to change their projects, in most cases they will need only to undertake a three-month  consultation, rather than going through the whole process of applying for consents again. That could unlock investment decisions across a range of technologies, potentially bringing in thousands of new jobs and billions in new investment. Upgrading our energy infrastructure is certainly key to getting our economy moving in the short term, so it is directly relevant to the Bill, but it is also essential for meeting our longer-term energy and climate change policy goals.

Upgrading the UK’s energy infrastructure is one of the largest programmes of investment in the UK, and we are working constructively with key stakeholders to highlight, remove or improve existing regulations that hinder investment. The clauses are largely technical in nature, but they will result in very real benefits for industry participants. Consumers will also benefit in the long term from the increased efficiencies that we think the clauses will deliver.

Clause 15 removes the bureaucratic burden on the energy industry and is part of my Department’s contribution to the Government’s red tape challenge, which aims to remove unnecessary measures from the statute book. The clause also sees the Government following through on commitments arising from Adrian Penfold’s review of non-planning consents for BIS. It repeals the requirement for developers or operators of gas-fired or oil-fired power stations to notify the Secretary of State for Energy and Climate Change when proposing to build a new power station or convert an existing power station to use gas or oil as fuel. It also removes a requirement to notify the Secretary of State of contracts for the supply of gas to such stations. We have agreed with industry that such notifications no longer serve any meaningful purpose, so the red tape should be removed.

Clause 16 seeks to address a minor ambiguity in the Gas Act 1986 that is potentially standing in the way of significant progress in the gas industry. The ambiguity is preventing Ofgem from launching its gas network innovation competition, which is worth around £160 million of additional industry investment in the gas grid over an eight-year period. The Committee should receive letters from Ofgem and from industry in support of clause 16; they are very keen to move forward with the investment competition in 2013 in order to realise quicker the benefits that can be achieved for consumers through greater innovation and efficiencies in our gas network.

Clauses 17 and 18 allow amendments to existing planning consents without developers having to make completely new planning applications under different legislation. That will save money, time and resources for industry, Government and ultimately consumers. Again, we are putting right a minor defect in existing law in a way that is broadly supported. For some projects that have already received consent, it may make the difference between going ahead in a more efficient and environmentally friendly form or being abandoned after years of work and considerable expenditure on professional advisory fees.

Clause 17 amends the provisions in the Electricity Act 1989 relating to consents for generating stations. In particular, it allows developers to apply for amendments to consents for electricity generating stations issued under the Electricity Act regime, which preceded the Planning Act 2008.

In conclusion, clause 18 amends provisions in the Town and Country Planning Act 1990 and the equivalent Scottish planning legislation. Clause 18 would allow the  Secretary of State in England or Scottish Ministers in Scotland to grant new deemed planning permission or vary existing deemed planning permissions when consents under section 36 of the Electricity Act are varied. The amendments are technical, but they would have a meaningful effect.

Photo of George Howarth George Howarth Llafur, Knowsley

We have now overrun, but I intend to exercise a bit of latitude. Will Michael Fallon be as brief as possible in covering the ground that he needs to?

Michael Fallon: I will be as brief as I can, Mr Chairman, about the remaining provisions. I am delighted that Adrian Penfold is joining us next week, so I will not draw the Committee’s attention to his particular clauses.

Clause 7 deals with broadband. Our ambition is for Britain to have the best superfast broadband network in 2015. Good broadband is scarcest in the countryside. The percentage of households with no or slow broadband in 2010 was 23% in rural areas as opposed to only 5% in urban areas. A total of £1.2 billion of public subsidy is being invested to roll out high-speed broadband and to close the urban-rural divide.

The changes in secondary legislation, which will be limited to five years to incentivise providers, are required because, even in the very best cases, it currently takes twice as long to install infrastructure, causing uncertainty and delay. In some cases, operators have faced delays of up to two years in reaching agreement on the siting of equipment.

Clauses 11 to 14 relate to town and village greens. The existing registered town and village greens will retain the strongest protections available. The Bill simply prevents applications for new town and village greens from being used to cut across the democratically accountable planning system. To be clear, the changes that we propose in the Bill do not affect existing town and village greens, but we hope to prevent such cutting across in future.

Clause 22 relates to business rates. As we committed to do on Second Reading, the Valuation Office Agency data have now been made available to the House. The agency has independently prepared initial estimates based on its professional judgment and informed by limited rental evidence, which suggests that 800,000 premises could have faced a real-terms increase in their rates bill in 2015, compared with only 300,000 seeing a fall. The uncertainty generated by such a revaluation in the current climate would impede growth, so the clause postpones the revaluation to give all businesses five years of certainty over their business rates bill.

Finally, clause 23 sets out proposals for a new type of employee status: employee owner. By increasing the range of employment status options, companies limited by shares will have a greater choice about how to grow and adapt their work force. It will enable employees to opt out of some—not all—employment rights in exchange for an equity share in the employer’s company, which will not be subject to capital gains tax, up to a limit of £50,000.

We have received more than 400 responses to the consultation, which closed only last Thursday. We will publish the Government response and an impact assessment shortly.

Photo of George Howarth George Howarth Llafur, Knowsley

Before colleagues ask questions, I remind all members of the Committee that questions should be limited to matters within the scope of the Bill. We must  stick strictly to the timings, otherwise we will not be able to conclude the business. For this part of the proceedings, we have until 10 am. I hope to avoid it, but if necessary I will cut someone off in mid-sentence to ensure that we meet the necessary timings.

Q 2

Photo of Mary Glindon Mary Glindon Llafur, North Tyneside

The planning Minister stated that the majority of local authorities are giving decisions on planning applications in a timely fashion and that it is the minority that are not achieving that. He gives a lot of facts and figures about those things. In the light of that, what evidence is there that the planning system in England is holding back growth?

Nick Boles: It is very clear. We have had a lot of responses from business organisations about delay. We had Professor Ball from Reading university estimating the cost of planning as a transaction cost and a delay cost. Recently, he said in evidence to the Select Committee that, if anything, he had underestimated the cost. A delay of more than 13 weeks in reaching a decision clearly means that people cannot invest, they cannot build and they cannot employ the people whom they were going to employ in building for a period of time. That is what we are trying to get at. I emphasise that most local authorities do a good job. All we are trying to do is ensure that those few who do not take their responsibilities seriously improve their performance.

Q 3

Photo of Mary Glindon Mary Glindon Llafur, North Tyneside

Would the Minister please say how he will address the specific problem?

Nick Boles: We will consult on a range of criteria for poor performance, and a measure of timeliness will basically be singled out in terms of making the major decision within 13 weeks. It will also look at the quality of decisions adjudged by the percentage of applications that are overturned on appeal, because if a decision is overturned on appeal, that effectively means that the decision was not made in accordance with local policies and national policy. If that is happening a lot, that means that the planning authority is not doing a good job in making decisions according to policies. We will publish criteria, which will be very objective. They will single out a very few local authorities whose poor performance is egregious and we will then offer, for a period of time, the ability for developers and applicants to make an application directly to the Planning Inspectorate, if they want to. They do not have to. Even with authorities in this category, they will not have to send the application to the Planning Inspectorate, but they will be able to, if they are worried that the authority’s poor performance means that they will not get either a timely or a good decision.


To pretend that developers will not take the option of applying directily to the Planning Inspectorate is ludicrous.

One possible reason for not granting applications locally is because they are not considered to be
appropriate - something the Inspectorate is simply not allowed to recognise.

Cyflwynwyd gan Iain Spencer Gerrard

Q 4

Photo of Andrew Stunell Andrew Stunell Democratiaid Rhyddfrydol, Hazel Grove

I want to focus on clause 23, which is on employee owners. The part of the Bill that details which rights will be withdrawn is quite complete, but the first part of the Bill leaves a number of things for further explanation. I wonder whether the Minister could say something about what level of agreement is required. Could he say something about the position faced by new applicants for jobs in a firm that already has a substantial amount of employee ownership, if they were doubtful about exercising their new rights?

Michael Fallon: That is a perfectly fair question. First, I should emphasise that this is entirely voluntary. Nobody has to engage in the scheme: no company has to do it and no employee has to do it. I think that others have suggested, since this proposal was put forward, that it might suit certain types of business better than others. It may particularly suit a new business that is being set up by a group of entrepreneurs. They will agree, for example, in that small, tightly knit company, that it would be damaging for the company if one of them started suing the other for unfair dismissal, so they agree to sacrifice some of their rights in return for this kind of added share benefit. I do not think that this will be taken up by every company in the land, and it certainly will not be forced on any company or employee.

Q 5

Photo of Andrew Stunell Andrew Stunell Democratiaid Rhyddfrydol, Hazel Grove

Could I take another example? If we consider some of the companies that provide services to the House in terms of cleaning and so on, it is foreseeable that one or other of them might decide to follow the same route. I am concerned to understand, if there are vacancies and people present themselves for a job, whether they have a realistic right to refuse the offer of ownership and the consequential reduction of their rights. We are already concerned about the way in which people in this building get treated. Can you respond to that?

Michael Fallon: I obviously understand that concern. No one wants to see employees pressurised into making a choice that may not be in their own best interests. I am happy to reflect on that particular point. However, I think that it is somewhat unlikely that, if a company goes to the trouble of designing an employee ownership scheme and handing over a stake in the company, it will consider that the employee concerned should be pressurised into accepting something that is not of benefit to him or her. I think those circumstances would be pretty unlikely.

There is a cost to the company in giving away some of its equity. That has to be balanced against the rights of the employee. I certainly do not want to see any circumstances in which employees are pressurised into accepting a loss of rights.

Q 6

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

I would like to direct the planning Minister to clause 1. I think you were saying that you were looking at two areas for designation: major applications that take more than 13 weeks, and the percentage of major applications overturned on appeal. Will you enlighten us a bit more on the time period that will be considered, what is going to be in the consultation, and when we can expect the consultation to happen?

Nick Boles: I am afraid that I am not able to say now exactly what will be the measures of the criteria. We are hoping to publish them shortly—definitely before the Committee discusses the clause, so the Committee will have a full chance to investigate the measures that we propose. Unfortunately, as I am discovering as a baby new Minister, Government wheels turn somewhat slowly in making collective decisions. My ability to publish things is not quite as immediate as I might like.

Focusing on the hon. Lady’s authority of the City of Durham, it decided 71% of major applications in 13 weeks, and only 1.3% of those decisions were overturned. It is clear that that authority has absolutely nothing to  fear from the Bill, because on both measures, it is a good performer. It will be much worse performers than that that will be caught by the criteria. However, as I said, I am afraid that I cannot share the detail with her at this stage, because I would be shot if I did.

Nick Boles: Sorry.

Q 7

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

While I am on the subject, the Minister obviously knows which authorities are not going to be brought into the criteria. Perhaps he could enlighten us as to which ones he thinks will be brought into the criteria.

Also, will he look at how local authorities become undesignated? If most major applications are to go directly to the Planning Inspectorate, how will an authority build up an evidence base to get out of being designated? They will want to deal with major applications.

Nick Boles: That is an excellent question. I will respond to your first question first.

As I have not published the criteria, I cannot single out the authorities that will be affected by them. All I would say is that, on the basis of last year’s figures, it will be a very small number. It will be fewer than 20, and it might not be more than 10. Of course, if performance gets a lot worse, the same measures may capture many more authorities.

Regarding the second question, first, the authorities concerned will still be dealing with the regular stuff of planning business; it is not like they will have nothing to work on. Secondly, they will be dealing with some aspects of major applications, because they will still need to advertise applications and handle local consultation. Thirdly, applicants will not be required to go to the inspectorate; they will do so only if they choose to. Therefore, the authorities may still get some major applications, and the Department, the Local Government Association and others will work intensively with them and the Planning Inspectorate to enable them to get back to a point where they can handle such things on their own. The last thing that anyone wants is for the Planning Inspectorate to be lumbered with dealing with such applications for a long time.

Just as with a school that gets into a bad way, there will be a moment of intensive, wrap-around care. That is what we are thinking about in order, hopefully, to restore to the authorities their full democratic control once their performance is returned to an acceptable level.

Photo of George Howarth George Howarth Llafur, Knowsley

I hope that we are coming towards the end of these questions.

Q 8

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

Just one more. Will the Minister say something more about who is going to judge whether authorities are acting in line with their own plans in the NPPF? Will it be simply numerical, on the basis of those overturned on appeal?

Nick Boles: The measure that we are looking at is the proportion of major applications overturned on appeal. By and large, if something is being overturned on appeal, it is not in accordance with either national policy or local plans.  

Q 9

Photo of Therese Coffey Therese Coffey Ceidwadwyr, Suffolk Coastal

I want to follow up on the business rates evaluation. I understand why the Government are trying to give certainty to businesses in the near future, but what will the Minister say to those who do not have confidence in the evidence in the written ministerial statement yesterday—who think that they are going to be a winner when the likelihood is that they will be a loser?

Michael Fallon: I think they should look at the estimates published by the Valuation Office Agency. There was some misunderstanding about the effect of the multiplier, and it is worth reminding the Committee that the exercise is revenue-neutral, so if there are gainers, there are also losers. On the estimate that the VOA has put before us, it happens that there will be many more losers than gainers, and the losers are well spread throughout the country and across every region, with small businesses, offices, public houses and business premises of that kind particularly affected.

Q 10

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

I want to concentrate on the employee owners part of the Bill. Minister, you said in your opening statement that you will publish the impact assessment when an analysis has been done of the responses to the consultation. Is that not slightly strange, given that the Bill is before us? Will the Government recommend removing the relevant clause from the Bill if the impact assessment so says?

Michael Fallon: I do not think it is strange, and nor is it novel. As Mr Murray will know, the proposal was first published in early October. We have moved extremely swiftly to give it legislative effect. The consultation ran for three weeks and finished last Thursday. We are analysing the consultation at the moment, and we are as anxious as he is to get the results in front of the Committee and give the Committee as full an impact assessment as possible of where people think the most likely impact is going to be, as quickly as we can.

Was there a second part to your question?

Q 11

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

If the impact assessment suggests that the clause should be withdrawn from the Bill, will you do so?

Michael Fallon: I do not think I am in a position here to describe what is in the impact assessment, as the consultation has only just ended. When the proposal was first published, many welcomed it. I can give the Committee a range of quotations in favour it. I think the CBI described it as a “niche proposal”, and others opposed it and thought that it would be an erosion of rights.

It is worth emphasising again that the scheme would be entirely voluntary. No one has to take up such rights, and no company has to adopt the new status. We will see what views have been raised in the consultation, whether they are all in favour of the clause, or whether they are all against.

Q 12

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

How will shares that are not listed be valued? Do you agree with the chief executive of Sainsbury’s, Justin King, who said that this could damage business even further in terms of reputation?

Michael Fallon: I do not agree with that. Many businesses have said

that they welcome this new kind of status and, indeed, the attempt that lies behind it to extend employee share ownership more generally. So I certainly do not agree with that—sorry, what was the first part of your question?

Q 13

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

How will shares be valued if they are not listed?

Michael Fallon: The valuation is something we are looking at. As I think I said on Second Reading, we need to address a number of technical issues surrounding this clause, and we are obviously waiting for the results of the consultation. One such issue concerns valuation, the other exit—what happens to the shares when someone leaves the company, and the circumstances in which he or she leaves the company. Those are technical issues that we obviously hope to address before we reach that part of the Bill.

Q 14

Photo of Bob Blackman Bob Blackman Ceidwadwyr, Harrow East

To return to the planning issues, Minister, although there has been a drop off in the number of major applications approved within the 13-week period, I think I am right to say that 87% of major planning applications were actually approved by local authorities albeit outside the time limit. The productivity of planning officers has improved. One reason why the delay takes place is that local authorities agree with developers to extend the period by negotiation. How much of that have you taken into consideration?

Nick Boles: That is an extremely important point to make. Mr Blackman will remember that I pointed out, in front of the Select Committee on which he sits, that there is a wrinkle in the current data because the authorities do and are encouraged to form planning performance agreements with applicants on major schemes, which means that by agreement it will take longer than 13 weeks. Currently, the data captured do not reflect that, which is why we have said that in the first year—while the data are like that—if authorities are captured by the objective criteria, we will then have a look and take representations from them. If they can show us that they had a huge number of planning performance agreements in there, then of course the last thing that we want to do is to try to capture an authority that is doing everything that we want it to do. We will also be getting the data refined for the future so that, hopefully, in future years the data will take out planning performance agreements and be a much more accurate measure of the performance on those applications.

Q 15

Photo of Bob Blackman Bob Blackman Ceidwadwyr, Harrow East

Also in relation to the Bill, the proposal is that developers could go straight to national decision making; the Bill states that the consultation process for local people will not be as thorough and the national planning authorities will not have to do everything that a local authority does, but you seemed to contradict that in your answer to an earlier question. To clarify, what will be the consultation process when a developer goes straight to the national body, and what will the role of the local authority be in that process?

Nick Boles: That is also a very good question. We will be listening to the Committee and we will be coming forward with detailed proposals, but of course the local authorities will still be charged with advertising any application, as they currently are, even if it is not being  dealt with as a decision-making matter by them. The whole point of advertising is to trigger consultation and a process of people writing in with their views and making objections. That will still happen, but the precise way in which consultation will work, or what elements of the local authority responsibility should remain, is something on which we are very keen to hear Committee views before we issue guidance on the point.

Q 16

Photo of Nick Raynsford Nick Raynsford Llafur, Greenwich and Woolwich

I draw attention to my interests as declared in the register and to three non-pecuniary interests relevant to the Committee’s proceedings: I am a director of the Town and Country Planning Association, an honorary fellow of the Royal Town Planning Institute and an honorary member of the Royal Institution of Chartered Surveyors.

Drawing on the evidence of one of those bodies, the TCPA, I ask the planning Minister if he agrees with its assessment that the effect of the reforms in clause 5 on section 106

“will be to reduce the quantum of land for affordable housing and risks increased social polarisation on particular sites”.

Nick Boles: No, of course I do not agree. The point is that what I and the Government are focusing on is affordable houses. A theoretical provision of land on which nothing is built is something that the previous Government were particularly good at providing, but affordable houses were not something that they were particularly good at providing and we are trying to correct that. This measure needs to be taken into account in combination with the other measures announced on the same day, including a further £300 million of subsidy for affordable housing. The number of affordable houses will go up as a result of the measures announced on 6 September.

Q 17

Photo of Nick Raynsford Nick Raynsford Llafur, Greenwich and Woolwich

None of the expert witnesses we have received evidence from agrees with that assessment. All of them, including the RICS, expect the number of affordable homes to go down.

Nick Boles: We have not yet heard from the witnesses; no doubt we will, and I am sure that the right hon. Gentleman will be very good at getting them to provide him with the answers that he is looking for.

Q 18

Photo of Nick Raynsford Nick Raynsford Llafur, Greenwich and Woolwich

The opening statement from the RICS, in the first section of its evidence, says:

“Whilst it is clear is that affordable housing is often difficult for developers to make viable, potentially reducing obligations on developers to provide much-needed affordable housing risks reducing provision at a time when need is great and Government are unable to fund affordable housing delivery.”

Nick Boles: We are not unable to fund it; we are funding it. That is why we announced an additional £300 million, which will produce an additional 15,000 affordable homes on top of the 170,000 that we are already delivering. Indeed, we are delivering about 50,000 affordable homes every year, more than the previous Government, who managed to deliver just over 40,000 a year during a boom. It is simply not the case that we are not producing the same number of affordable houses; we are producing more.

I also point out to the right hon. Gentleman that there are many Labour and other authorities around the country that behave like the authority of his hon. Friend the Member for Rochdale, which voluntarily  renegotiates section 106 agreements and attracts huge applause from me for doing so, because it understands that what matters to people—its residents—are houses that they can live in, not theoretical agreements about land that never gets built on.

Q 19

Photo of Nick Raynsford Nick Raynsford Llafur, Greenwich and Woolwich

At a time when affordable housing starts are at the lowest level seen for many years and the social housing programme has virtually halted, I have to say to the Minister that not many people will accept the claims he made a moment ago. May I ask him why the Government have not named a single affordable housing scheme to benefit from the Infrastructure (Financial Assistance) Act 2012, which is also one of the Government’s measures to try to get stalled projects going again?

Photo of George Howarth George Howarth Llafur, Knowsley

Order. I do not want to go too far with this line of questioning because we are straying towards the very outer limits of the scope of the Bill. If the Minister could be brief, I would like to move on.

Nick Boles: I will be very brief and say that I am the planning Minister, so I am afraid I am not responsible for the individual schemes, but I am sure that the right hon. Gentleman will have every opportunity to quiz my colleagues on that point.

Q 20

Photo of James Morris James Morris Ceidwadwyr, Halesowen and Rowley Regis

I have a question about clause 21 and infrastructure designation. The Bill provides that certain large commercial and business developments could be determined nationally rather than locally. What will be the criteria for determining the type of developments that fall within that ambit?

Nick Boles: We will be consulting on precisely how the definition should work, because although we do not want to capture very many projects, we do want to capture those that are important, where there is some evidence that they are being held up and that decision making under the current framework is not of the highest quality. We are looking at between 10 and 20 cases per year being referred in addition to the Planning Inspectorate, in the whole country. It is not going to affect every local authority, but I hope that it will unblock some very important schemes.

Q 21

Photo of James Morris James Morris Ceidwadwyr, Halesowen and Rowley Regis

What sort of projects are we talking about?

Nick Boles: We are looking at the whole range of business and commercial activity, although at this stage we are not looking at major retail. Non-retail business and commercial activity potentially will be captured by the scheme—major industrial parks, major research parks and other major business and commercial developments.

Q 22

Photo of Simon Danczuk Simon Danczuk Llafur, Rochdale

Am I right in saying that you have not consulted on clause 22—the postponement of business rate revaluation?

Michael Fallon: I think that might be right. Let me just turn to clause 22.

That is right. We have not.

Q 23

Photo of Simon Danczuk Simon Danczuk Llafur, Rochdale

You have not consulted on it.

Your retail guru, Mary Portas, said that delaying the business rates revaluation is a tragedy for the high street. What do you say to your retail guru?

Michael Fallon: As I said earlier, I am not sure that the extent to which the business rating system is revenue-neutral is fully understood. Those who were expecting some reduction in their bills perhaps have not understood the full effect of the multiplier. The evidence we have from the Valuation Office Agency—the best estimate that it has been able to make—is that there would be far more losers than winners had we proceeded with the original revaluation. It is wrong to suggest that the postponement of the revaluation damages any particular sector or any particular region of the country. There is no evidence of that.

Q 24

Photo of Simon Danczuk Simon Danczuk Llafur, Rochdale

So Mary Portas has got it wrong; it will not be a tragedy for the high street.

Michael Fallon: No, on the contrary, if we had proceeded, there would have been more damage to small businesses in particular. There would have been more losers than winners.

Photo of George Howarth George Howarth Llafur, Knowsley

Order. This must be the last in this particular series of questions from the hon. Gentleman.

Q 25

Photo of Simon Danczuk Simon Danczuk Llafur, Rochdale

I understand that the system is revenue-neutral, but there are losers: 300,000 businesses will lose out. Just tell the Committee why a Conservative-led Government are making thousands of businesses pay more in taxes than they should, for an extra two years.

Michael Fallon: What we are doing is giving businesses certainty. Nobody could be quite sure how much they were going to lose or win. As I have said several times, there would have been more losers than winners had we gone ahead. But what is far better in a very challenging economic time is to give businesses absolute certainty as to what their bills will be right through the next five years.

Q 26

Photo of Gordon Birtwistle Gordon Birtwistle Democratiaid Rhyddfrydol, Burnley

Over the past five to 10 years, we have had the hideous area action plans instructed on by local government. I am hoping that they have now been dispensed with because they created havoc within local government and in planning. Can the Minister confirm that all future developments will be delivered on local area plans, not area action plans that are creating nothing but grief?

Nick Boles: I am sorry, Mr Howarth, but this does not directly relate to the clause and the Bill. I am not absolutely briefed in the ancient history of planning, but it is certainly the case under the Localism Act 2011 that the local plans will be the driver of decision making with the very much reduced national planning policy framework as a backstop on any other questions.

Q 27

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

I want to come back to town and village greens. The Minister was very clear on the value of town and village greens in his opening statement and giving reassurance about protection for current ones. Why therefore prevent a process that has some purchase within localities and change it? People like the Open Spaces Society and the Campaign to Protect Rural England are saying that that is a sledgehammer to crack a nut and the wrong way of going forward.  

Michael Fallon: I do not agree with that. The previous Government reviewed the situation and I shall quote from the review. When the Department for Environment, Food and Rural Affairs reported in 2009, it said:

“the most significant finding from this research so far is the existence of two parallel systems between which there is minimal communication: the town and village green registration process and the planning system. In our view this seems to be problematic…the processes in each system rarely take explicit account of issues/decisions in the parallel system, even though they can have significant importance for each other.”

The purpose of the legislation in the Bill is to bring those two things together. It has been welcomed, in fact, by local government that these two systems come together and planning considerations are taken as one.

If the Committee would like an example, I am very happy to provide it from the village of Saham Toney in Norfolk where 10 homes were built. The use of a field for local housing was consulted on. There was an overall positive response from the local community and only after the homes were built was a town and village green application lodged. Two and a half years later, the housing residents, owners and builders are still awaiting the outcome of that application process, with the combined legal fees to the developer, landowner and taxpayer now coming to some £50,000. I want to clear up the confusion about the proposals. They will not affect existing town and village greens and will not weaken the protection that they have, which has been enhanced in the new national planning policy framework. The proposals will protect local communities’ ability to promote sustainable development through their local plans and their neighbourhood plans.

Photo of George Howarth George Howarth Llafur, Knowsley

This will have to be the last question in this part of the proceedings.

Q 28

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

It seems to me that the town and village green process is localism at its heart. Is there not an opportunity to allow for that localist approach and the views of local people, notwithstanding the perverse outcomes that the Minister has talked about, and allow local concerns to be properly considered within the planning process?

Michael Fallon: With respect to the Committee, I think local concerns are best addressed through the local planning system and through the democratic process by local councillors after consulting the local community. I do not think it is right that a subsequent application to register a green should cut across local and democratic decision making. That is where I think the balance should lie. In the end, it should be a matter for the planning system as a whole.

Q 29

Photo of Bob Blackman Bob Blackman Ceidwadwyr, Harrow East

In relation to broadband, there has been criticism of the impact on areas of outstanding natural beauty and national parks. Can we establish the purpose behind the changes to the legislation?

Photo of George Howarth George Howarth Llafur, Knowsley

Before the Minister responds, I will call Roberta Blackman-Woods so that we can deal with two questions together.

Q 30

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

Can the Minister guarantee that clause 7 will not lead to mobile phone masts, telegraph poles and large cabinets cluttering up and ruining areas of outstanding natural beauty and our national parks?

Michael Fallon: On the first point, the object of clause 7 is to extend superfast broadband to rural areas. We estimate that as a result of the clause some 4.3 million additional homes will receive superfast broadband, most of them in rural areas. They would otherwise be left unserved without additional subsidy or additional intervention. I know people are concerned that relaxing the restrictions on overhead lines will lead to a proliferation of poles in rural areas. Let me be clear: we are not here to discuss masts. What is at issue is only cabinets and poles. The legislation does not extend to masts. There are already overhead poles in some parts of the country. To allow overhead poles in other parts where they are currently being held up will reduce the cost of broadband deployment by between 15% and 20% in rural areas. That again will allow a faster roll-out.

Local authorities will of course retain an important role. As so much of the deployment is being publicly funded, it will be up to the provider to satisfy the local authority as to how the delivery will be rolled out. The local authority that is procuring the network in its area will be able to ensure that the deployment will be as sensitive as possible and that overhead lines can be minimised, so we are not cutting local authorities out of the process. Where public funding is involved, they will be able to influence the provider in the nature of the delivery.

Photo of George Howarth George Howarth Llafur, Knowsley

Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions of these witnesses. I thank the Ministers for their responses, and also the Committee for its disciplined approach. We managed to get every question into the time allocated. We will now hear oral evidence from the Local Government Association and the Association of Convenience Stores.