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On our own amendments, Amendment 147FKA requires an integrated transport authority and marine plan authority to be specifically included as persons to whom the duty to co-operate applies. This is a probing amendment to inquire whether there is any update of the draft list of public bodies that by order will be subject to that duty. ITAs are included on the list, as is the Marine Management Organisation, a point addressed by the noble Lord, Lord Greaves. I presume, as he outlined, that the latter covers a marine plan authority. What will the position be after the demise of PCTs, which are included in the draft list? Will GP consortia be included in it?

Amendment 147HCA adds to the activities that must be the subject of constructive engagement. They include the local transport plan and the preparation of joint infrastructure planning guidance as well as other activities that support sustainable development. Amendment 147HF expands on the requirements for the preparation of joint infrastructure planning guidance, how it should proceed and what it is to cover. Amendment 147HZA further qualifies that the active engagement should be with the objective of achieving sustainable development, consistent with the ethos that we are seeking to embed within the Bill.

I am conscious that the Minister might argue that a lot of these matters are going to be fleshed out in the NPPF. When we debated this last week, though, there was no enthusiasm for the Government to make this a statutory document. It is therefore just guidance, and anyway the NPPF is not supposed to contain anything like the level of detail necessary to ensure effective strategic co-operation. Generic planning policy does not amount to a spatial plan that shows where things go and how they relate to each other.

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On the amendments in this group, we support the noble Lord, Lord Greaves, in his Amendments 147FJ and 147FK, my noble friend Lord Whitty in

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Amendment 147G and the noble Lord, Lord Greaves, in his Amendment 147GA as well as his Amendments 147HA, 147HB and 147HC, expanding the activities to not only the preparation but the implementation of development plans. As I said earlier, we support the noble Lord's amendment that seeks to put in place a right for someone to make representations to the Secretary of State if someone is considered not to be complying with the duty to co-operate; I think it is Amendment 147P.

We support the amendment of the noble Lord, Lord Cameron of Dillington, that raises the issue of strategic infrastructure assessment, reinforcing the point that there are many issues that simply cannot be settled in bilateral or slightly expanded discussions and arrangements between individual authorities. There are more amendments in this group that we would support; I will not flesh them out in detail, given the time, but I have indicated the thrust of the amendments that we support.

I believe that my noble friend Lady Andrews has raised an important question about English Heritage but also more generally about what that duty would entail. The noble Lord, Lord Cotter, has focused on small business and LEPs. My noble friend Lord Beecham touched on the point that at the moment LEPs are a bit of an amorphous arrangement. It is not very clear what their status is-are they an incorporated body or an unincorporated body? The extent to which they are actually a person in law is also not clear. These matters would be helped if that were made clearer. The noble Lord, Lord Cameron, mentioned issues of CIL, which we will come on to shortly and hopefully have an interesting debate on.

Lord Taylor of Holbeach: My Lords, I begin by thanking my noble friend Lord Lucas for raising the whole question of rabbits out of hats. I think that the answer was given to him by the noble Lord, Lord McKenzie of Luton: a question of time is a question for the usual channels. They will indeed ensure that we achieve our aspirations for the Bill-I am certainly determined to do so. The way that the Committee has dealt with this enormous group of amendments is extremely encouraging and suggests that we will be able to meet our task, and I thank noble Lords for agreeing to this grouping.

This is an important part of the Bill. The duty to co-operate will require local councils and other bodies to work together actively and on an on-going basis to ensure that strategic issues are effectively addressed in local and marine plans. The duty will be a key element of the Government's proposals for strategic planning once the regional strategies are abolished. The noble Lord, Lord McKenzie, pointed to the fact that some issues are on a substantial scale and the region seems the most likely vehicle for their discussion. From my own experience, which is similar to his as we both live on the borders of regions, one of the most difficult aspects of planning on a regional basis in my part of the world was the very fact that the prime focus of economic activity in the area-namely, Peterborough-was in a different region, and the construction of a road between Boston and Peterborough required an enormous amount of convoluted negotiations in order

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to achieve this objective. In my view, and I have expressed this in debate before, large units create much more inflexible boundaries than do small, active units and this duty to co-operate ensures that the appropriate level of scale can be brought to bear on any particular aspect of planning strategy.

These authorities will be working alongside incentives such as the New Homes Bonus and the reformed Community Infrastructure, as has been said. It will act as a strong driver to change the behaviour of councils and other bodies. We have worked closely with a wide range of external bodies whose advice and expert guidance has helped us shape the duty that we are debating today.

As I move through the amendments and the comments made in the debate, I will do my best to answer the various points. Amendment 147FK seeks to remove the enabling power to prescribe bodies that will be subject to the duty to co-operate. That would just leave local and county councils as bodies that are subject to the duty. We believe this is not enough to achieve the degree of co-operation that is needed to ensure that local and marine plans address strategic matters effectively. Bodies such as the Environment Agency and the Homes and Communities Agency play a critical role on strategic issues and that is why we intend to prescribe them along with others which have an important contribution to make.

As I have mentioned, the list of prescribed bodies will include, for example, the Environment Agency, Natural England, the Home and Communities Agency and the integrated transport authorities. The draft regulations have been placed in the House Library and we will be consulting on them during the summer. I might say in her absence to the noble Baroness, Lady Andrews, that we all appreciate the work of English Heritage but it has an ongoing engagement with local authorities on the whole issue of the preservation of heritage and historic buildings. The expectation under this Bill is that this duty should be applied in a reasonable and proportionate way but should be part and parcel of the existing ongoing relationship between these national bodies and the local authorities concerned.

The noble Lord, Lord Beecham, asked about the Greater Manchester Combined Authority, which we jointly saw through in the Moses Room one afternoon. In effect, each of the local authorities is indeed a planning authority. The Greater Manchester Combined Authority does not have powers as a planning authority but, because it is combining in its activities, it can serve as an exemplar of a duty to co-operate. Indeed, it is a very fine example of that activity. The list is in the House Library and we intend to consult on the regulations over the summer months.

Amendments 147FJ, 147FL and 147FKA seek to add marine planning authorities on the face of the Bill. Amendment 147FK also seeks to add integrated transport authorities but I have covered that point. Amendment 147R seeks to amend the Marine and Coastal Access Act 2009, with which my noble friend Lord Greaves and I were intimately involved, to ensure that the Marine Management Organisation has regard to the duty to co-operate when preparing marine

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plans. It would also require the Marine Management Organisation to demonstrate compliance with the duty as part of the independent investigation process for marine plans. I can assure my noble friend Lord Greaves and, although the noble Lord, Lord Whitty, is not in his place at the moment, I would like to reassure him, too, that the duty to co-operate will indeed include the marine areas for coastal authorities.

We appreciate the importance of co-operation in relation to preparing marine plans and they are included in the activities on which co-operation is expected under the duty. That builds on current practice where the MMO has consulted widely, including with local councils and organisations like the Environment Agency in preparing the East Inshore and East Offshore Plans. The noble Lord, Lord Cameron of Dillington, will understand that there is a duty under the Flood and Water Management Act, which we considered fairly recently, for co-operation, not only within local authorities but with the Environment Agency, to make sure that proper flood plans are prepared. This is another example of this system working in practice.

We appreciate the important role of the MMO and integrated transport authorities under the duty to co-operate and that is why we have included them in the list of bodies that will be subject to the duty. As a result, Amendments 147FJ, 147FL and 147FKA are unnecessary. With regard to Amendment 147R, the first part of the amendment is also unnecessary because Clause 95 already applies marine planning. It would also require the MMO to demonstrate compliance with the duty as part of the independent investigation process. This process works very differently from the independent examination procedure for local plans, not least because of the inability to make any binding proposals. Therefore, we do not consider this amendment would assist in ensuring compliance with the duty.

Turning to sustainable development, which was mentioned by a number of noble Lords, Amendment 147G seeks to ensure that the preparation of local plans and related activities enables the planning of sustainable development. Amendment 147HZA aims to ensure that the engagement between councils and other bodies will achieve sustainable development. We share a commitment to sustainable development which underlies these. The Planning and Compulsory Purchase Act 2004 includes a duty on councils preparing local plans to contribute to the achievement of sustainable development. That is why we have included sustainable development in the heading of Clause 95 and put it at the heart of strategic matters that we expect to be addressed in local plans.

The duty to co-operate will ensure that councils and other bodies plan for sustainable development by engaging actively and on an ongoing basis on strategic planning matters as they prepare local plans. We think this addresses the concerns but we will look again at it and see whether we have gone far enough.

On the activities that are covered by the duty to co-operate, the noble Lord, Lord McKenzie of Luton, mentioned housing especially as being a big issue. We are going on to discuss housing in the next group of amendments. Amendments 147HA, 147HB and 147HC seek to extend the scope of activities to which the duty

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applies to include the implementation of local and marine plans as well as their preparation. We appreciate and share the desire to ensure that the strategic priorities of local and marine plans are implemented but we believe that the requirement to co-operate on the preparation of plans is a powerful one. These plans set up-to-date frameworks, which will be implemented by councils through the development management system and the delivery of sites in their ownership. Plans will also set the framework for the investment priorities of other bodies, which will be set out in their corporate plans. The amendment is therefore considered unnecessary.

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Amendment 147HE seeks to ensure that the scope of activities on which co-operation is required is not limited to planning documents, and that it also includes documents that affect the development and use of land. Amendment 147HCA seeks to add local transport plans and joint infrastructure planning guidance to the list of activities to which the duty applies. The duty to co-operate covers local development documents, which, under Section 17(3) of the 2004 Act, include all documents that set out the authority's policies relating to the development and use of land in its area. This may include transport, infrastructure and a range of other strategic issues. These amendments are therefore unnecessary.

Amendment 147HD seeks to narrow the scope of activities to be covered by the duty to co-operate. It is important to ensure that the scope is sufficiently broad to cover activities that could reasonably be considered to prepare the way for local and marine plans.

We now come on to LEPs. There was an interesting challenge from the noble Lord, Lord Greaves, who asked: what is the definition of an LEP? LEPs are described thus in the draft local planning regulations:

"An LEP is recognised by the Secretary of State".

I suppose that is a succinct and self-referential description of an LEP. I am sure all noble Lords will recognise one when they come across one.

Lord Beecham: The Minister has artfully described what an LEP is. Can he tell us what an LEP does? That is the thrust of the question.

Lord Taylor of Holbeach: What an LEP does is a subject for another debate altogether. However, it is well worth saying that it brings these local authorities, working together under a duty to co-operate in general terms, together with the local business community for the benefit of that community's development in all the ways that we wish to see-economic, social and environmental. That, really, is what an LEP does.

Lord Beecham: May I press the Minister a little further? Does an LEP have powers and resources to do these things, or is it a forum for discussion? That has value but it is not quite the same as having functions of the kind I have just mentioned.

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Lord Taylor of Holbeach: My Lords, what I am describing is exactly the vehicle through which power is exercised-the duty to co-operate and the construction of local plans. That is exactly what we are engaged in. The interface between the LEP and this process is important. We may have accidentally entered into something that elaborates, I hope, on the force of the Government's argument in this area. My noble friend Lord Cotter was a little concerned that the membership of the boards of LEPs was perhaps not fully representative. We are not telling LEPs who they should put on their boards, but we expect board members to be drawn from a breadth of experience-from small enterprises through to large businesses and representing key sectors in their areas. My experience of the LEP that covers my area seems to bear this out through the individuals who have got involved and engaged with it.

It is appreciated that the aim of the amendments in this group is to ensure effective co-operation on local economic development issues. We share that objective but believe that it is better to give LEPs the space to innovate, rather than to impose a national statutory model on them. Effective co-operation on economic development issues can be achieved through an enabling power, which requires bodies that are subject to the duty to have regard to the activities of other bodies when preparing their local plans and related activities. We intend to prescribe local enterprise partnerships, which will represent local business interests in local planning regulations, for this purpose. We have placed the draft regulations in the House Library and will consult on them later this month. The approach that we are taking will support growth and strengthen local economic co-operation under the duty, but it will leave LEPs the freedom to innovate and work flexibly.

Lord Greaves: I hear what my noble friend says with interest. First, will he reflect on having just described LEPs as representing business interests? Surely the whole purpose of LEPs is that they are a partnership between business and local authorities, and therefore represent both those interests, not just one of them. Secondly, could he explain how merely putting a duty on LEPs to co-operate and promote co-operation amounts to a rigid national statutory framework?

Lord Taylor of Holbeach: I am sorry if I misled the Committee. I am well aware that LEPs are joint bodies, representing the interests of local government and business. I think that is what I described earlier. If the syntax of what I just said implied that that was not the case, I withdraw that. However, I think I said that we intend to prescribe local enterprise partnerships, which will represent local business interests in local planning regulations for this purpose. My point is that they represent business interests as well as community interests.

There are several amendments that I would loosely describe under the heading "Engagement under the duty to co-operate". They include Amendments 147J, 147K, 147HP, 147HQ and 147JA. They seek to strengthen the engagement required under the duty to co-operate by requiring actions, rather than giving councils and bodies the flexibility to consider whether to undertake these actions. I refer again to the contribution of the

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noble Lord, Lord Cameron of Dillington. The key point is that strategic planning needs to be flexible to allow councils to decide how to co-operate effectively. This will depend on the issues that they face. As I have already described and as the noble Lord himself said, flood and water management requires a totally different combination of interests from, say, highways or housing policy, which are founded in different ways. That is the great advantage of this structure. Prescribing a specific outcome, such as a joint infrastructure assessment, would not allow for the flexibility that is needed to make this an effective vehicle.

Moving on, Amendments 147L and 147M address similar concerns about engagement. They seek to establish a specific document-a joint strategic infrastructure assessment-to be produced as evidence of effective engagement under the duty. Amendment 147HF addresses similar joint infrastructure planning guidance, which it implies should be included in the activities to which the duty applies. It sets specific requirements in terms of the purpose and content of these documents. The amendment seeks the involvement of councils that are part of a local enterprise partnership and requires that the objective of the bodies preparing these documents should be the achievement of sustainable development.

We share the objective of having a duty to co-operate that will ensure effective co-operation by councils and other bodies. However, strategic planning is not a one-size-fits-all approach. It needs to be a flexible process led by councils that allows them to respond to particular issues and local circumstances. Flexibility is essential to allow them to decide how best to work to serve their local communities, businesses and interested parties. We agree that strategic infrastructure plays a critical role in supporting the delivery of economic growth and housing, and that is why we have included it in the Bill.

Clause 95 requires councils to consider whether to work jointly on policies and activities related to strategic cross-boundary and county issues. It gives local planning authorities and county councils flexibility on how to fulfil this responsibility, rather than forcing them to produce specific documents. That strikes the right balance by ensuring that co-operation will result in effective local plans and by strengthening accountability to local communities, businesses and interested parties.

Councils that are part of a local enterprise partnership will already be subject to the duty to co-operate, and there is no need to refer to them separately. I have received assistance for the noble Lord, Lord Beecham, on the functions of LEPs. We do not want to be precise on their roles or functions. They should follow local priorities that they and their communities consider important. We want LEPs to leave development proposals to local enterprise. That is their task and their role. They are not public bodies and are not reliant on grant funding, but they provide a forum and an agency to start up funding, if that is part and parcel of the proposals. LEPs are therefore facilitators rather than providers, if I may describe them in that way.

Amendment 147J would also remove the requirement on councils and other bodies to consult on agreements on joint working approaches. However, we believe that

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this is an important element of co-operation in local planning that will allow all the relevant parties to suggest the most effective ways of working.

A number of amendments in the group seek to describe strategic matters, and would delete the reference to sustainable development and focus on development that impacts on at least two planning areas and projects forming part of a strategic network. Amendment 147HM focuses on development needs that cannot be accommodated within one planning area and the development of potential strategic importance. One might say that the issue of the housing requirements of Stevenage that the noble Lord, Lord McKenzie, brought to our attention is relevant.

It is appreciated that there are many ways in which strategic matters could be defined for the purpose of the duty to co-operate. We recognise that the concern behind these amendments is to ensure that the duty effectively captures strategic matters that affect more than one authority. We share this concern but believe that the duty should capture strategic matters in a way that is flexible and allows councils to respond to particular local circumstances. We wish to retain the reference to sustainable development because of the importance that we attach to it, as I highlighted earlier.

Some concern was expressed about statutory guidance. Amendment 147N deletes the requirement on councils and other bodies to have regard to any guidance that the Secretary of State may issue about how the duty to co-operate should be complied with. Such guidance, should the Secretary of State decide that it is necessary, will be important in helping councils and other bodies to understand how to discharge their responsibilities under the duty to co-operate. It will therefore be important that they have regard to it.

6.15 pm

Amendment 147P makes provision for representations to be made to the Secretary of State regarding compliance with the duty to co-operate and provides the Secretary of State with very broad powers of direction. A linked amendment, Amendment 148ZZZZBA, removes the sanction of failing the local plan examination if an inspector finds that a council has not complied sufficiently with the duty. We do not think that this approach is proportionate. The requirement for compliance with the duty to co-operate when making local plans is coupled with a powerful sanction. If councils cannot demonstrate that they have satisfactorily complied with the duty, their local plans may not pass the independent examination. In addition, local planning regulations will require councils to report progress on compliance against the duty to co-operate. This strikes the right balance. We do not think that the direction-making powers proposed are necessary-nor would they be consistent with our aspirations for localism.

Lord Beecham: To take the Stevenage situation again as an example-there will be others-one authority may say, "We are not going to have housing in our borough to accommodate you". There are two distinct points of view, and there is no real sanction. If a plan does not get approved, that suits the authority that wants to keep the status quo. Therefore, there is no recourse for the Stevenages of this world in that situation.

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Is that not the problem? There will be no co-operation and no plan, and there will be no solution to the problems that one of the authorities might have.

Lord Taylor of Holbeach: The process of co-operative working actually requires co-operation and a sense of shared purpose in serving the communities that the local authorities represent. There may well be tensions. There may well be situations where there is difficulty in seeking agreement. The law will place on local authorities a duty to seek to resolve these differences. If they show that they have not considered the outcomes of a co-operative process in formulating their local plans, those plans will be rejected. There is, therefore, gentle coercion. However, as with all circumstances where power is being devolved down to local authorities, the public interest is being vested in those democratically elected bodies-namely, the local authorities concerned. That is the purpose of this legislation. I do not need to lecture the noble Lord, Lord Beecham, on the virtues of democracy and the accountability that comes with it. What is missing is the sense that Whitehall is looming large over the whole process and is seeking to put pressure to achieve a particular outcome through this process. It is important to emphasise that.

Lord McKenzie of Luton: The noble Lord has been generous in speaking to all the amendments, but I want to be clear on the housing issue that the noble Lord, Lord Beecham, described. We have a similar issue in Luton. One authority with a desperate need for affordable housing that cannot be accommodated within the borough may look across the boundary and see opportunities there, but the other authority may take the view, "We don't want any of this affordable housing encroaching upon our villages". How is that situation to be resolved? You might have one authority that has genuinely gone through a consultation exercise, has taken a view, and has said, "We don't want that form of housing here". Another authority may have a desperate need for that housing. When the soundness of the plan is due to be judged, will the inspector involved just see whether or not the processes and so on have complied with what is required under the co-operation duty, or will there be some value judgment that the inspector can make, and say, "In all the circumstances, this was an outrageous position for you to take, and you have therefore not complied with the duty to co-operate"?

Lord Taylor of Holbeach: It may be easier to consider the detail of the point that the noble Lord has raised when we come to discuss the next series of amendments. In general terms, there will be evaluations not just of the outcome of the local plan but of the way in which evidence has been collected together in order to provide that plan. That is perhaps a safeguard that we might have. We will have an opportunity to talk about housing in particular, so I hope that the noble Lord will forgive me if I seek to move on-I have been talking a long time, but there were a lot of amendments.

In winding up, let me deal with Amendment 147HN, which seeks to define planning documents by referring to town and country planning and marine planning

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legislation. However, the term "planning documents" is not used in the provision. As it stands, the duty covers all local planning authority documents that set out their policies in relation to the development and use of land. It also covers marine plans. This amendment is therefore unnecessary.

Amendment 147LA, which seeks to require the bodies subject to the duty to co-operate to have regard to the activities of prescribed bodies, is also unnecessary as this is already provided for in Clause 95, in new Section 33A(2)(b).

I now come to an exciting point in bold type that says that Amendment 147Q addresses a typographical error in Clause 95. We are happy to accept this amendment when it is moved by the noble Lord. I hope that noble Lords will remind me when that particular amendment is called.

I will close by saying that I am satisfied that the duty to co-operate will ensure that local councils, county councils and other bodies work together in the spirit of constructive and active dialogue. That will maximise effective working in the preparation of local and marine plans in relation to strategic cross-boundary issues and county matters. With these reassurances, I hope that the noble Lords are willing to withdraw the amendments.

Lord Lucas: My Lords, perhaps the solution to the difficulty of the noble Lord, Lord McKenzie of Luton, is to reach back into the history of local government and reinstate single combat between neighbouring chiefs, who would then be seen to be earning their salaries at least.

In that great Gladstonian oration that we have just heard, I missed the answer to my question. How does the wording in Clause 95 permit the duty to cover the sort of situation that I was discussing, where there is a national network to be looked after and it needs to be discovered where the burden of that falls between various local authorities? I do not see how that is dealt with. I would be happy if the noble Lord would write to me between now and Report.

Lord Taylor of Holbeach: I will certainly do that.

Lord Greaves: My Lords, I thank the Minister for the great care that he has taken in responding to these amendments. We might get on a bit quicker on one or two of them if the people providing him with his briefings understood that, often in Committee in this House, we put down "leave out" amendments in order to find out what things mean and how they will work, rather than delete them. We are not actually always trying to get rid of them. I realise that sometimes they have to guess which it is, but that is the case.

There is a difference of approach. Some of us would like to have a much clearer high-level duty placed on local authorities and other bodies and far less detailed regulations on how to do it. Some of us would like to rely on that, rather than have a weaker duty and then masses of detailed regulations. The duty to co-operate is a classic case of that. On the central issue of whether the duty in this part of the Bill

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is as strong as it needs to be, some further discussion will be required before we are finished with the Bill. There is a feeling in quite a bit of the Committee that perhaps it would be a good thing if we could find ways of strengthening the duty a bit further without resulting in even more reams of detailed rules and regulations. I hope that the Minister would be open to discussion of that, in so far as we are able to have discussions over the summer.

On that basis, I thank the Minister and everybody who took part in this debate, and I beg leave to withdraw Amendment 147FJ.

Amendment 147FJ withdrawn.

Amendments A147FK to A147P not moved.

Amendment 147Q

Moved by Lord Greaves

147Q: Clause 95, page 73, line 38, leave out "(1)(b)" and insert "(1)(c)"

Amendment 147Q agreed.

Amendment 147R not moved.

Clause 95, as amended, agreed.

House resumed.

Southern Cross Care Homes


6.27 pm

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, I shall now repeat as a Statement the response given earlier today by my honourable friend the Minister for Care Services to an Urgent Question tabled in another place on Southern Cross Healthcare. The response was as follows.

"As the House will be aware, Southern Cross has been working with its landlords and lenders to agree a restructuring process to secure a viable way forward for the future. The Government have made clear, as I set out to the House on 16 June, that our overriding concern is the welfare and safety of the 31,000 residents in Southern Cross's care, and we expect all parties to work together to secure a consensual, solvent restructuring of the business that meets their collective responsibility to secure the welfare and care of those residents.

When I last updated the House on 16 June, Southern Cross, its landlords and its lenders had announced the previous day an agreement to work through, over a period of four months, arrangements for a consensual, solvent restructuring. Yesterday's announcement was one step in that ongoing process, and discussions continue to resolve the remaining steps.

I know that there has been some concern about what yesterday's statement may mean, and that residents and their families-as well as staff-are anxious to know what will happen. Let me repeat the assurance I

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have given to this House before: whatever the outcome, no one will find themselves homeless or without care. We will not stand by and let that happen. We have worked and will continue to work with the Association of Directors of Adult Social Services, the Local Government Association, the Care Quality Commission and others to ensure that there is an effective response to any potential disruption to the continuity of care, and that all residents are protected. A consensual restructuring that assures a smooth transition to new arrangements will mean that those contingency arrangements will not be needed, and that is what we want to see.

Let me reassure the House on some of the questions that I know honourable Members may have. First, yesterday's announcement-which stated that at the end of the restructuring process the Southern Cross corporate entity would cease to exist-has no effect on the provision of care or the operation of care homes. Southern Cross remains in operation, and will continue to operate all its care homes until any transfer to new operators takes place.

Secondly, the transfer of care homes to alternative operators will be a managed process that ensures the continuity of services. Yesterday's statement makes clear that care home staff will transfer on their current terms, and the service that residents receive should be unaffected by the transfer. All parties involved in the negotiations have given a clear commitment that continuity of care will be paramount in this process. Local authorities are already working to ensure that they can assist in the smooth transfer of arrangements of homes in their area, and the department has been working with ADASS and the LGA to support that.

Thirdly, no transfer will take place without the new operator being approved and registered by the Care Quality Commission. There has been speculation that companies with no experience in the care sector will take over the running of homes. That will not happen. Alternative operators will need to be reputable and experienced companies which are able to satisfy the CQC that they are capable of delivering high quality care and meeting all regulatory standards. The CQC will not drop its standards in ensuring that requirements are met. I understand that each of Southern Cross's landlords are settling their arrangements as to which care home operator to work with, and that is an essential part of the discussions that are ongoing. That will cover all landlords, so that there is a clear way forward for all homes.

Finally, I can assure the House that the Care Quality Commission has been working with Southern Cross, landlords and other stakeholders for several months to ensure the smooth transition of services and has processes to deal with re-registration and undertake the essential checks needed as a priority. It is having ongoing conversations with Southern Cross, landlords and other providers on the timing of applications.

Our priority as a Government is to ensure that the current problems with Southern Cross are resolved and that a sustainable way forward can be secured. But as the Prime Minister has previously stated to the House, we are also clear that we will take action for the future to ensure there is proper oversight of the

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social care market. The Health and Social Care Bill allows us to extend to social care-if we decide that it is needed-the financial regulatory regime we are putting in place in the NHS. However, regulation is not the only solution. We will approach this in a measured way and as part of wider reform in the social care market to ensure that we do not face a similar problem in future.

I said that yesterday's statement from Southern Cross was one step in an ongoing process over the coming weeks and months. Until all future arrangements are settled, Southern Cross will continue to operate and provide care in all its care homes. It is only at the end of the process, when all transfer arrangements have been completed, that Southern Cross as an entity will cease to exist. By then, all homes will have a clear plan for future operation and for the continuity of services into the future.

What we now want to see is a swift conclusion to these important discussions, to offer reassurance and certainty to residents and their families. I want to reassure the House that the Department of Health has been and remains fully engaged, and senior officials are in daily contact with all the parties to ensure that the interests of residents are at the forefront of all discussions. The Government will continue to keep close contact with all involved in the process, and I will continue to keep the House informed".

My Lords, that concludes the Statement.

6.35 pm

Baroness Thornton: My Lords, I thank the Minister for repeating the Statement. Although we had a discussion about Southern Cross two weeks ago, it is an ongoing sorry tale which seems to get worse by the day for the residents, their families and the staff of Southern Cross. I think the Minister will accept that Southern Cross's announcement yesterday that the responsibility for managing the 752 homes will pass back to the 80 landlords who own them will almost certainly cause a vacuum that is bound to be the source of great uncertainty and anxiety among residents and their families.

I am reassured that the Government are very active on the matter, but there are questions that we need to have answered. Southern Cross is not being informative and there are things that we need to know about the situation. My questions concern what happens next and how the Government will manage this difficult situation. Can the Government publish a list of all 80 landlords? I have read in the media rumours that some landlords still have to be identified. Yesterday, it was further announced that control of 250 of the homes would be handed back to their landlords immediately. What does immediately mean? Does it mean tomorrow? What will happen? What is the process?

The House needs to know which homes those are and who is running them. Is a list available? It is certainly not available on the Southern Cross website. It is also likely that many of the landlords will have little or no experience of running care homes. For example, does the Minister have any information on the intentions of property-owning companies such as

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London & Regional, which owns 90 Southern Cross homes, or Prestbury, which owns 21? In the previous Statement in the House, the Minister assured the House, as he has again, that the Association of Directors of Adult Social Services is trying to support its members, who will have a key role in ensuring that the new operating companies are able to provide good quality care and that they know how to perform financial stress tests to ensure that their business models are sound. What support and assistance are the Government providing to ADASS?

I read from my press cuts that Downing Street has said that public money will be used to ensure that those in the homes can stay. Is that true and how would it be achieved? Would money be made available through local authorities? If the Government intend to provide additional resources, they will need to do so to hard-pressed local authorities if they are expected to help. What advice are the Government giving to local authorities if the property company or landlord for any of the home-owning companies is offshore?

I am reassured that new operators taking control of the homes will need to be registered with the Care Quality Commission and that plans are in place to ensure that that happens, but given the pressure on the CQC, I wonder how it will be able to achieve that within the timescales that we seem to be facing. Will the Government make more resources available to the CQC to deal with that worsening situation?

What can the Minister tell the House about the terms and conditions of the 44,000 employees of Southern Cross? Does the Minister know how many homes are likely to close? What is the timetable for such closures likely to be? What will happen to those residents? We know that, for the very old and very vulnerable, a move such as that can result in their death or hospitalisation. That is an extremely distressing matter.

Turning to the care home sector more generally, it would seem that although Southern Cross is definitely the most urgent, it is not alone in the sector in its struggles. The UK's second largest care home provider, Four Seasons Healthcare, has amassed debts of £730 million that have to be repaid by September 2012. What will happen to the Lloyds properties, as this landlord is in administration? NHP, which owns 250 homes, is at a standstill with its bondholder. Indeed, my honourable friend John Speller MP, in his question in another place to the Secretary of State for Business, Innovation and Skills, pointed out that it is not just old people we are talking about here. For example, Craegmoor provides residential care services for adults with mental health problems or learning disabilities. It has 3,300 places, 174 care homes and a debt of £37.8 million. Care Principles provides similar services. It has 450 places in 17 care homes and secure hospitals; its debt is £45.77 million. Care UK runs care homes and services for the elderly. It has 3,100 places in 57 homes and a debt of £127 million.

Clearly these problems have to be addressed. I do not expect the Minister to answer questions about those homes. However, I am asking the Minister whether there is a plan and, if so, what is it? It seems to me that Southern Cross is actually the beginning of this process and solving its problems may not be sufficient.

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6.41 pm

Earl Howe: My Lords, I am grateful to the noble Baroness for her comments and questions. She asked a number of the latter. I hope I can answer most of them. It is important to appreciate that this is a managed process. The announcement that the Government made last month of a four-month restructuring window still applies, and we are at the first major stage of that process. Therefore, anxieties about the welfare of residents are misplaced because this is not a case of the collapse of Southern Cross. It is still very much a managed and solvent restructuring that is going on.

The noble Baroness asked me about the landlords. It is not for the Government to liaise with all the landlords directly but they are all represented on the restructuring committee, working to develop a plan for the future. Local authorities and the CQC will link as necessary with all the landlords as they take through their plans for the future management of homes. I am advised that the CQC understands that the Southern Cross landlords' committee wants the handover of care home properties to take place at the end of September. The CQC is co-ordinating its activities to ensure that regulation does not prevent the handover across England. I hope that reassures the noble Baroness that nothing is going to happen tomorrow. It is very much part of a planned and structured process.

The noble Baroness asked about care homes that were in debt. Many companies, in all sectors, may have some degree of debt, quite obviously-this is a normal part of business, not necessarily a concern. We are clear that Southern Cross's particular business model-not owning but leasing nearly all its properties-is a unique model and that is what has given rise to its particular problems.

The noble Baroness asked about the consequences of the landlords taking back their properties. The department is very clear that it expects all parties to maintain service continuity and quality of care while the restructuring process is ongoing. Our principal concern, as I have said, is for the safety and well-being of the residents. CQC will pay particular attention to any care homes where there is a concern that quality may be at risk or inadequate. It does have the resources to do this. It has indicated that there is not a problem in that sense. CQC has regular dialogue with Southern Cross at corporate level in addition to the attention it gives to individual services. We have emphasised to CQC the importance of ensuring that Southern Cross homes continue to comply with regulations and safety and quality requirements. Of course, we expect CQC to take the necessary action if it finds, for example, that staff reductions are affecting safety and quality of services.

The noble Baroness asked about government money for Southern Cross. Southern Cross is not asking for a bailout. It is looking to resolve its problems and it is for the company, its landlords and those with an interest in the business to put in place a plan that stabilises ownership and operation of the care homes. That process is happening and we must let it continue.

A number of providers that will acquire Southern Cross homes are already registered with the CQC as care providers in their own right, such as Four Seasons.

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There are established processes in place to allow these providers to extend their current registration to take on additional care homes. That process, assuming that it occurs, is relatively straightforward. Providers who are not known to or registered with the CQC will require a full application that will be subject to full scrutiny and a determination of fitness to provide the service. This cannot be a case of companies registered overseas suddenly becoming care home operators-that will not happen. Any new operator must demonstrate that they are fit and proper people to conduct this type of business and prove that to the CQC. Each landlord will be required to ensure that it has arrangements with a reputable and capable operator which can meet the CQC's requirements. This is what the companies are now resolving as restructuring discussions continue.

It is also important to emphasise that while the CQC is committed to ensuring continuity of care, it will not lower the regulatory bar or reduce the rigour of registration. CQC's principal concern is the safety of service users and it will not compromise on the standards that are required. At the same time, we expect that local authorities will ensure that any transfer or new arrangement to provide care for residents takes place smoothly and with continuity of care for service users assured. We are talking to the Association of Directors of Adult Social Services, the Local Government Association and, of course, the CQC, as I have mentioned, to ensure that robust local arrangements are in place.

Finally, the noble Baroness asked about the staff and their legal position. This is not a matter that the department can comment on directly, but staff are protected by the relevant employment law. I understand that Southern Cross has undertaken in a letter to care staff that they will be transferred under their existing terms to new operators under TUPE. That is our understanding of the position.

Earl Attlee: My Lords, perhaps I may remind the House of the benefits of short questions which will enable my noble friend the Minister to answer as many questions as possible.

6.48 pm

Baroness Barker: My Lords, first, I wish to return to the issue that I raised with the Minister on 16 June when we last discussed this matter: the inequalities in geographical distribution of the problem. In particular, will help be given to local authorities in the north-east, where Southern Cross was the major provider? There are not vast numbers of other providers and the problem is far more acute because there is no surplus residential care into which people can be quickly fitted.

Secondly, will the department put in place a monitoring programme for all the residents of Southern Cross, to be carried out over the next two years to monitor the welfare of the individuals who are in the midst of this crisis? The noble Baroness, Lady Thornton, mentioned a fact that has been borne out by research over many years, which is that when people in residential care are subject to stress of this kind it has a very detrimental effect on their health. I wonder whether, in the midst of this, the Government might take that duty upon themselves.

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Earl Howe: My clear understanding is that many homes will continue in operation with the same staff, and that the residents of those homes will therefore not be required to move. We hope most earnestly that no resident of any Southern Cross care home will be required to move. I am not aware of the precise situation in the north-east of England, but my noble friend's comments suggest to me that there is no undue cause for concern in that part of the country. The plan certainly would be, as far as possible, to maintain the residents in their current homes, and they should notice no difference in the quality of care that they are receiving.

To the extent that residents are required to move-and as I have said, we hope that that will not be necessary-yes, of course there will have to be a process of monitoring the welfare of those people in those circumstances. The duty to do that falls primarily on local authorities, where they are the commissioner of the care, but I have absolutely no doubt that the CQC will wish to add to that oversight. I believe that it is too soon to speculate-because we are not sufficiently far down the restructuring process-on the extent to which residents will be disrupted, but the number of homes that do not in the end prove viable as businesses will emerge in due course.

Lord Campbell-Savours: My Lords, first, I noticed that the noble Earl did not respond to the question asked by my noble friend on the publication of the names of the property companies that stand behind many of these homes. Will a special regime be introduced by the CQC of random unannounced visits for homes managed by property companies? It is important that we get an assurance that it will carry out random unannounced visits as against other forms of visits which are possible. Secondly, given that Regulation 13 of the CQC registration regulations 2009 requires a service provider to,

of the operation, who then is going to monitor compliance with Regulation 13? Should we not now have-set and enshrined in some regulatory arrangement -some authority given the power to seek to secure compliance, or are we simply going to leave it to an offence, as the noble Earl has referred to in an Answer he has given to me, whereby no one is actually monitoring these matters?

Earl Howe: First of all, the CQC is an independent body; it is not under the jurisdiction of Ministers, and it must be free to organise itself as it sees fit. I cannot undertake on its behalf that it will perform random unannounced visits. It does, however, do that as a matter of course, and it generally does so on a risk-based basis so it would surprise me if, where the CQC saw that there was an enhanced risk to residents, it did not make it its business to perform inspections. Looking ahead into the medium term, should the Health and Social Care Bill pass through Parliament, as the Government propose, local HealthWatch will be in a position to enter and view care homes, as LINks are at the moment, but I believe that HealthWatch will be, in most areas at least, in a better position to undertake such inspections on a random basis.

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The financial liability will of course not be the province of HealthWatch, but any concerns about the welfare of residents would be subject to the powers of HealthWatch to refer up to HealthWatch England, and in so doing, through HealthWatch England to the CQC. The financial viability of care homes is of course a live issue. I have commented on this in the past, and we are certainly considering whether Clause 57 of the Health and Social Care Bill could be used to extend the regulatory regime that we are proposing for the NHS to care homes. That is something that we will need to discuss because it would amount to a regulatory burden on care homes. Nevertheless, I do not belittle the issue. My ministerial colleagues in the Department for Business, Innovation and Skills are looking at the issue of private bodies that provide publicly funded services and whether there are implications in the sense that the noble Lord has indicated.

Lord Elystan-Morgan: My Lords, has the Minister considered the legal question of fraudulent trading, which seems to be apposite not only to the case of Southern Cross, but indeed-according to the comments made by the noble Baroness, Lady Thornton-to other care companies as well? Does the Minister recollect that exactly 50 years ago, in a case called Wellfield, this House, sitting in its judicial capacity, defined fraudulent trading as a situation where the directors of a company continue trading, knowing that there is a risk that debts will not be able to be cleared as they arise? Bearing in mind that as far as Southern Cross is concerned, many months ago, it announced that it would not be able to pay its tax liabilities, nor indeed to pay more than 70 per cent of the rents due to lessors, would it not seem that there was a clear breach of what is now Section 993 of the Companies Act 2006?

Earl Howe: My Lords, my advice is that Southern Cross is not insolvent in either sense of the word. Its assets, I am told, exceed its liabilities, and it is able to meet its commitments as they fall due, thanks to the agreement reached between the company, its landlords and its bankers. The process announced on 15 June is the key to this: the company's restructuring committee is developing a plan to stabilise the ownership and operation of Southern Cross care homes. We expect, as I have said, that there will be an orderly process of reassigning homes to landlords and new operators. That process will take place between now and October, during which time continuity of care will be maintained. Nothing that I have said changes the outlook for the medium term, and I believe that we can say, and that the company can say, that insolvency is not an issue at present.

The Lord Bishop of Manchester: My Lords, for all the assurances that the Minister has given, and for all his obvious sensitivity to the issues that many residents face, the truth remains that a lot of people in these care homes feel themselves at present to be in an extremely vulnerable position. In these circumstances, does he feel that the level of salary and bonuses that some directors have is appropriate, and would he like to comment, in the light of what he said earlier about

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financial implications, on whether or not that is an area that in future he would feel needs to be examined more carefully?

Earl Howe: I am grateful to the right reverend Prelate. I do not think any of us feels comfortable if the directors of struggling companies take substantial bonuses. I have to say that I do not have a briefing on whether the directors of Southern Cross have taken substantial bonuses in recent months, but I shall make it my business to try to ascertain that. But of course the right reverend Prelate is right to say that we must be clear that the stability of care homes, looking after frail, vulnerable, elderly people, should not be put at risk by mismanagement. I am afraid that Southern Cross has been a story of mismanagement since it was established in its present form.

Lord Beecham: My Lords, my noble friend Lady Thornton referred to the fact that the owners of many of these properties are offshore companies. Is the Minister comfortable with the fact that according to a claim by the GMB union, some 336 of these care homes-just under half the total-are owned by companies outside the UK, with 325 of them registered in tax havens? Does the Minister agree, as I asked yesterday of his ministerial colleague about the Statement on the White Paper on public service reform, that the high proportion of residential care places managed by Southern Cross-some 18 per cent of the total of places, with roughly a further 18 per cent managed by another five companies-does not represent diversity of provision and increases the risk of things going seriously wrong on a large scale, as has happened in this case? Does that not lead to the possible conclusion that to talk about diversifying without any indication of a limit on the number of places that might be operated in a field like this needs to be rethought?

Earl Howe: I think the noble Lord and I are at one in wanting to see diversity of provision. The restructuring that I suspect we are likely to see emerge from this will result in just that, as a matter of fact. It appears that Southern Cross is to be split into a number of smaller enterprises, and that in itself should, we hope, lead not only to a more diverse arrangement but a more secure one. However, I do not take issue with the thrust of the noble Lord's remarks at all.

On the issue of the ownership of some of these care homes, our concern as Ministers is not so much where the shareholdings lie as on whether that in itself has implications for the quality of the care that residents receive. I am not aware that that has been a factor. As long as the ownership of these care homes is legal and we are not seeing tax evasion as opposed to tax avoidance, to an extent it is not an issue for the Government. But it is something that is likely to be examined quite closely as the restructuring takes place.

Lord Sutherland of Houndwood: My Lords, I welcome the way in which the Minister's Statement has given reassurance to those in care homes and their families. It is immensely important that we continue to do that. There is, however, a further area of reassurance that I

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hope the Minister will be able to say something about. We have reassured staff through TUPE that perhaps there is some protection for their terms and conditions, but speculation in the press today suggests that the cost of care in these homes might rise significantly because of a period of underinvestment. I hope that we can at least monitor any such rises to ensure that they are gradual rather than sudden and therefore financially debilitating.

Earl Howe: My Lords, the noble Lord, Lord Sutherland, makes a very good point. The advice I have been given is that during the restructuring process, the cost of care should not be a factor. While local authorities may have to revise their budgets, that should not result in disruption for residents.

Lord Popat: My Lords, does my noble friend agree that most of the landlords of these care homes were the former operators themselves, and therefore the transfer of registration by the CQC will be a very smooth process? However, we will end up with a few homes where the landlords might not want to take them back. Should we not have contingency plans for local authorities to rent such premises on a temporary basis until a permanent solution is found?

Earl Howe: My noble friend is quite right to say that it is indeed possible that landlords may not wish to take the properties back, but in that scenario it has been agreed that those landlords will look to partner with a reputable care home operator. So it might well be that a care home will join a consortium run by one of the major care home operators which is now in discussions.

Lord Bilimoria: My Lords, the Minister said that Southern Cross's business model was unique, but surely it is not since so many care homes have been following the Opco/Propco model. Does the Minister therefore agree that it was possibly not just mismanagement that was responsible for this situation, but the fact that the business model which worked in the good times-the previous owners did very well out of it-is not working now? As the noble Baroness, Lady Thornton, said, several care homes are in difficulties. Does the noble Earl think that the cuts that are being made might have a role to play as well? Have the Government made a full analysis of the dire situation in the care home sector?

Earl Howe: Clearly, my Lords, before the Government produce a White Paper on social care a thorough analysis will be done, and we have the Law Commission report that will guide us in part. Southern Cross developed a business model that worked during times of increasing prosperity, when property values were buoyant and occupancy levels were similar, but it entered into contracts with its landlords which are proving unsustainable in the present climate. Demand for residential care is reducing generally. Not only are councils purchasing fewer care home places, but people are also opting for greater personalisation and more innovative approaches to providing care services, including

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being looked after at home. My advice is that the Southern Cross business model is unique. That may be-the noble Lord has considerable knowledge in this area-an overstatement and perhaps there are some care homes which are similarly structured, but it is certainly the largest and most significant model of its kind that we are aware of. From the advice I have received, I do not think we should be unduly concerned that other instances on a par with Southern Cross are likely to occur.

Lord Hollick: My Lords, I welcome the Government's decision to prioritise sustainability because the demise of Southern Cross is a stark example of the dangers to sustainability of overly aggressive financial engineering: too much debt, too many unwise property deals and too many gullible banks; in short, too much avarice and not enough prudence. As the Government contemplate how best to regulate the financial aspects of this industry, how will they ensure that the new operators of Southern Cross care homes will be financially sustainable?

Earl Howe: My Lords, we are reverting to the question asked by the noble Lord, Lord Campbell-Savours. The CQC already has some duties to ensure that the care homes it registers are able financially to sustain their business, as well as simply providing a quality service. But this is clearly an issue that needs to be looked at. As I have mentioned, we are taking powers in the Health and Social Care Bill which potentially could see the care-home sector subject to the kind of financial regulation that we are applying to the NHS. This is a work in progress.

Lord Campbell-Savours: My Lords-

Earl Attlee: My Lords, I am very sorry, but we are out of time.

Electricity Market Reform


7.10 pm

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, with the leave of the House, I shall now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Energy and Climate Change. The Statement is as follows.

"With permission, Mr Speaker, I would like to make a Statement on the reform of the electricity market.

Since privatisation in 1990, our electricity market has served us well, delivering reliable, affordable electricity, but in the years ahead we face unprecedented challenges. The existing market was not designed to meet them. Over the next decade, around a quarter of our existing power stations will close, threatening the security of our energy supplies. Some £110 billion of investment is needed to replace them and to upgrade the grid.

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That is twice the rate of investment of the last decade and the equivalent of 20 new power stations. At the same time, demand for electricity could double over the next 40 years as the population increases and we increasingly turn to electricity for heat and transport. We also face ambitious carbon emission and renewable energy targets, as we seek to build a cleaner energy future for Britain and the world.

In order to achieve our goals we need to take decisive action now to increase low-carbon electricity generation, including nuclear, renewable energy and carbon capture and storage. None of these challenges can be met for free. We will have to pay to secure reliable, clean electricity for the future and we cannot ignore the long-term trends in electricity prices. Increases in wholesale costs and in the carbon price are likely to lead to higher bills in the future, even without factoring in the huge investment needed in new infrastructure. So it is vital that we put in place market arrangements that deliver this investment as cost-effectively as possible. The current electricity market is simply not up to the job. It cannot deliver investment at the scale and the pace we need.

Without reform, our reserve capacity-the power plants we can call on when demand surges-will fall to uncomfortable levels. We would face a much higher risk of blackouts by the end of this decade. We would also be locked into a worrying reliance on fossil fuel imports, putting us at risk of rising and volatile prices. Consumers could end up paying even more. That is why I am putting before the House today a series of measures to reform the electricity market, diversifying our generation mix and boosting investment in secure, sustainable and home-grown, low-carbon technologies. There are five key elements to our reforms.

First, the Chancellor announced in the Budget a new carbon price floor to put a fairer price on carbon, reduce uncertainty for investors and provide a stronger incentive to invest in low-carbon generation now.

Secondly, we will send a clearer message that low-carbon electricity is a key part of our future energy mix. We will introduce a new system of long-term contracts in order to remove uncertainty for both investors and consumers and to make low-carbon energy more attractive. Contracts for difference will be introduced for all forms of low-carbon generation, lowering the cost of capital and allowing clean technologies with high up-front and low long-run costs to compete fairly against traditional unabated fossil fuels. This will build on the carbon price floor, providing the additional clarity and certainty that investors need.

Thirdly, we will introduce an emissions performance standard to send a clear regulatory signal on the amount of carbon new fossil-fuel power stations can emit. This will reinforce the requirement that no new coal-fired power stations are built without carbon capture and storage, while ensuring that vital investment in gas can take place. CCS is a key part of our plan to decarbonise electricity generation. It is the only technology that can potentially reduce emissions from fossil-fuel-fired power stations by as much as 90 per cent.

Fourthly, to ensure security of supply in the future we will introduce a new contracting framework for capacity, changing the way we secure our back-up

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electricity. This capacity mechanism could mean centrally procuring capacity which is set aside from the market and used only when it is needed, or it could mean a market-wide mechanism, in which all providers offering reliable capacity are rewarded. Under both options, we plan to ensure fair and equivalent treatment between all the ways of achieving what we want-demand response, storage, interconnection with our European partners and extra generation. Shifting or cutting demand for electricity is likely to be more cost-effective than simply building more and more power plants. It complements our work to drive down demand through energy efficiency measures such as the Green Deal and smart meters.

Fifthly, we will put in place transitional arrangements to ensure that there is no hiatus in investment while the new system is being set up, and we will create new institutional arrangements to deliver the reform package.

Together, these reforms will tackle the immense challenges facing the electricity market. They will put in place the framework to deliver the capacity and demand-side response we need in order to guarantee future security of supply. They will encourage investment in proven low-carbon generation technologies and they will give investors confidence that there will be a market for electricity generated with commercial carbon capture and storage, confidence that will drive investment in both demonstration and commercial CCS plants.

Six energy companies supply around 99 per cent of customers in the UK. Alongside action by Ofgem to improve liquidity, these reforms will boost competition within the market and make the UK a magnet for low-carbon investment, generating jobs and growth. This will help energy-intensive industries. However, we are also committed to bringing forward a package of measures to ensure our continued international competitiveness.

Finally, the reforms I have set out today will achieve our aims at least cost to the consumer, with bills for households and businesses likely to be lower and less volatile over the period up to 2030 than if we had left this market as it is. They will enable us to build a flexible, responsive electricity system, one powered by a diverse and secure range of low-carbon sources en route to a cleaner, greener future, insuring us against fossil fuel price shocks, ending 25 years of policy dithering and keeping the lights on and the bills down.

Alongside the electricity market reforms, I am also publishing today the renewables road map. For too long, discussion about renewable energy has focused on barriers. Now, for the first time, we have set out a detailed step-by-step plan to overcome those obstacles. The road map sets out a comprehensive action plan to accelerate the UK's deployment and use of renewable energy. It puts us on a path to increase our renewable energy consumption fourfold by 2020 while driving down the cost over time. Growth on that kind of scale will be challenging, but necessary. The road map identifies eight technologies that have the greatest potential for the UK, such as offshore wind, where we have abundant natural resource and already have the world's largest market.

Subject to further value-for-money assessment, the department is setting aside up to £30 million over the next four years to support technology development

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programmes to improve the efficiency and reduce the costs of offshore wind. With industry, we are setting up a task force to drive the work to achieve cost-competitive offshore wind. The recently published microgeneration strategy also outlines the actions that the Government are taking to tackle the non-financial barriers which could prevent microgeneration from realising its full potential. Together, the renewables road map and the microgeneration strategy will reduce costs for consumers and enable mature renewables to compete against other low-carbon technologies in the longer term.

I am also publishing today the final report of the Ofgem review. The review reaffirms the Government's commitment to a strong, independent regulator, able to give confidence to investors, protect consumers and help meet our energy and climate targets. The summary of conclusions was published in May; this final report provides further detail on how the Government will seek to strengthen the regulatory framework.

The package of reforms that I have announced today will yield the biggest transformation of the market since privatisation. They will create an enduring framework for future investment and secure our electricity supplies for the future. They will provide our consumers with the best deal possible, help us meet our ambitious carbon targets and put us at the forefront of low-carbon technological development, ready to lead the world in the next energy revolution. I commend the Statement to the House".

My Lords, that concludes the Statement.

7.20 pm

Baroness Smith of Basildon: My Lords, I thank the Minister for repeating the Statement. We welcome the fact that Chris Huhne, the Secretary of State, is seeking to address the matter and agrees with his predecessor on the need for reform. We should recognise that he has come a long way on this issue. He no longer describes nuclear as a "failed technology", but says that it is an essential part of the UK getting off the "oil hook", accepting its role as part of the energy mix for energy security. I am still unclear on the Government's position on subsidy for nuclear. Chris Huhne has mentioned on many occasions that there will be no subsidy, but that seems to be interpreted as no subsidy that is different from that for other low-carbon generation.

In his December Statement, the Secretary of State said:

"We have a once-in-a-generation chance to rebuild our electricity market, rebuild investor confidence and rebuild our power stations ... this will be a seismic shift, securing investment in cleaner, greener power and delivering secure, affordable and low-carbon energy for decades to come".-[Official Report, Commons, 16/12/10; col. 1066.]

We agree that that is what this reform should deliver, although I would have put greater emphasis on affordability. That is why this Statement and the legislation that will follow are so important. If we were to get this wrong now, it would be a missed opportunity and would bind future generations to costly and ineffective measures.

So what do we expect from this reform? First, the consumer must be at the heart of any reform. We have to reconcile the interrelated aims of energy affordability

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to protect the consumer, decarbonisation to protect the environment, and energy security to protect both the consumer and the economy. The Government have recognised that the current energy market structure will not deliver investment in new low-carbon technology and provide the additional capacity that is needed to meet our carbon reduction targets. We welcome that acceptance, because it is clear that fundamental change is necessary to meet these targets, secure energy supply and encourage investment. We will want to be reassured that these proposals add up to a responsible and realistic package that will deliver those interrelated aims

I regret that, to date, despite our seeking to be very constructive with the Government, we consider that they have fallen short in their stated aim to be the "greenest Government ever". Every time that one firm announces a price increase, the Secretary of State's advice is to shop around and change energy supplier. We can do that only so many times as one after another company puts up its prices. For the sake of the economy, business and domestic consumers cannot continue paying ever higher prices.

The Energy and Climate Change Committee in the other place has recommended that any reforms need to be accompanied by,

Given that the Government have pulled all government-funded energy efficiency programmes, can the Minister say anything today about how these reforms will help both business and domestic energy consumers with their ever-increasing bills?

The Minister's comment in the Statement that bills for households and businesses are,

really is not good enough. If, as predicted, consumers are going to be asked to pay more to deliver this programme, we need to give them far greater certainty. I ask the Minister and his colleagues to reflect on that.

Another concern is that recent ill-judged government intervention in the energy market has already led to a hiatus in energy investment and uncertainty across all sectors. I do not want to labour the point today as we will debate on Thursday the solar feed-in tariffs fiasco that has destabilised the solar sector and sent shockwaves through other renewable sectors, but there are other issues which have had an impact on investment. Companies, including RWE, are considering pulling out of the UK because of the uncertainty caused by the Government on investment. That has been underlined by the Pew Environment Group's report showing the UK slumping from fifth to 13th in a global ranking of countries for green investment. Constraints on the green investment bank have led the CBI deputy director-general, John Cridland, to say that the bank,

The Energy Bill seems to have disappeared into a black hole in the other place; it will not even have its final stages before the recess. To date, the Government's track record is not as good as we would want it to be. In all our interests, with the White Paper before us today, the Government cannot afford to get this wrong.

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As the Minister has acknowledged on many occasions, we want to be supportive, and I always approach these issues constructively. We will support measures that achieve the Government's stated aims and benefit the consumer and the economy. The Government will want to satisfy some key tests if reform is to work. A new market needs to be greener but also create confidence, clarity and certainty for industry; make room for innovation in emerging energy solutions; provide a good deal for both domestic and business consumers as users and taxpayers; and deliver the necessary investment in the UK energy sector for security of supply.

The document before us today is quite lengthy, as are the associated documents published by the Government. They propose a mixed bag of measures. I am not sure that I yet fully understand how they will work together to give us the policy structure that we need to achieve our objectives.

For example, the Energy and Climate Change Committee in the other place considers that the level at which the emissions performance standard has been set,

Since that report was published, have the Government been able to take note of those concerns and make any adjustments before the final White Paper was published today?

The carbon price floor was introduced by the Budget independently of these proposals. DECC seems now to understand the impact of what is seen as a tax grab on industry, thereby potentially exporting businesses and their emissions overseas. What action will the Government take to ensure that this does not disadvantage British business, and what discussions on these issues has the Minister had with organisations representing intensive energy users in industry in the UK?

I certainly welcome the Government's acceptance that their message that low-carbon electricity is a key part of our future energy mix has not been clear enough and that action will be taken to remedy this. I look forward to further announcements on the detail. As he will appreciate, the renewables road map, to which he referred, can work only if investors can have confidence in the Government's ambitions.

The detail in the Government's plans regarding the ongoing consultation on the capacity mechanism and the contract for difference will be crucial. These are complex issues and the devil will be in the detail.

The transitional arrangements to ensure that there is no hiatus in investments while this new system is set up are welcome, but, as I have already said to the Minister, there is a hiatus now and transitional arrangements are urgently needed to restore confidence in the market. Perhaps the Minister could say something about the timing of the transitional arrangements. That would be very helpful.

Our existing "big six" energy companies will undoubtedly need to help to provide our new energy generation, but we need to free up the suffocating oligopoly which stifles real competition from new energy investors. Today's announcement and publication of the documents is welcome and part of an ongoing

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process. However, to identify the problems is easy-we have discussed them in your Lordships' House and the other place on many occasions-but the challenge is to meet the objectives. We will continue to play our part in that.

7.28 pm

Lord Marland: My Lords, I am very grateful to the noble Baroness for her comments. She rightly said that meeting the challenge is very difficult. The previous Government found it very difficult. I am happy to say that we have played our modest part by encouraging six new nuclear power stations, setting out a road map and introducing a series of measures that will regenerate the energy and electricity supply market-which, as I said earlier, has not happened for 20 years. We have inherited a legacy of inactivity. It is a major structural problem; it is not one that we welcome, but we in this Government intend to get our hands on it and deal with it.

I note the noble Baroness's point about nuclear subsidy. I shall continue to remind her that we have always said there will be no subsidy for nuclear other than that available to wider technologies. The wider technologies obtain a subsidy and nuclear is now part of that.

On the noble Baroness's comment about bills, it is fair to say that bills have risen and are going to rise. I go to my petrol pump and find it costs me £1.33 to fill my car-no, I am sorry, it costs me £1.33 per litre. That is more than £1.33 to fill the car-it is about £1,033. Bills are rising outside our control because we are reliant on fossil fuels and oil coming from different shores, rather than the wonderful security in which a number of noble Lords, including my noble friend Lord Lawson, were able to bathe-an oil supply from our own sources. When you invest in a new infrastructure which needs £110 billion there will be bill increases on the horizon. Do we want to do this? Of course we do not-we want to keep bills as low as possible and to reduce them-and the plans we have set out will enable us to recover that position and to not see the same exponential rises that we have had of late.

The noble Baroness referred to feed-in tariffs, doubtless with the solar photo voltaic debate that will take place on Thursday in mind. Do we think it right that the Government should prioritise billions of pounds to support an industry which is not necessarily climatically suited to this country? The Government have to make tough decisions; they have to establish value for money for the taxpayer when deciding where to allocate funds to support developing technologies. The current Government, of which I am proud to be part, do not consider that this technology requires the same degree of support. The industry is becoming mature and the cost of equipment is coming down dramatically and we have therefore taken a view on it.

The noble Baroness referred to RWE. I believe that RWE is less certain of its future in its home country than it is here. It has various jurisdictional issues in terms of the future of its own nuclear industry that present it with far-reaching problems beyond our shores.

The Government have committed to the green investment bank and we have allocated funds to it.

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You cannot just click your fingers and establish a funding bank overnight, but in 12 months we have got to grips with the issue and it is well on the path.

We have consulted on the issue of EPS but we have not changed fundamentally what we set out to do. It is important that we have standards for companies that do not comply with a reduced performance format. That is the long-stop part of regulation which will set a clear regulatory path of where people can perform in energy supply.

Clearly we need to take into consideration the energy-intensive industries and we are consulting with them at the moment. We will announce a package of support for them to encourage them towards lower carbon usage. They are major employers in the country and major international exporters. It is important that we recognise that in any regulation we introduce, and at the end of the year we will announce a package of measures to support that.

I hope that that explanation goes a long way towards answering a number of the excellent points made by the noble Baroness. I have a feeling that there will be some more excellent points in a moment.

Earl Attlee: I remind the House of the benefits of short questions in order to allow everyone who wants to get in an opportunity to do so.

7.34 pm

Lord Lawson of Blaby: My Lords, this is a most extraordinary Alice through the Looking GlassStatement. Is my noble friend the Minister not aware that almost every single assertion in it is the precise reverse of the truth? Is he not aware that if renewable energy was genuinely cheaper than conventional carbon-based energy, there would be no need for this plethora of measures? Is he not aware that every single energy expert, from Ofgem to all the independent experts in the universities, Professor Dieter Helm and so on, has said that the Government's policies will lead to a substantial increase in electricity prices?

My noble friend mentioned 2030. Is he not aware that the Treasury has estimated that the carbon floor price alone will lead to an increase in electricity prices of between 60 and 70 per cent by 2030, to the great detriment of the consumer, British industry and the British economy, which-goodness knows-is in a fragile condition as it is? On this issue, the Government's policies are not the solution but the problem.

Lord Marland:It is always a joy to hear my noble friend-as indeed he is. Let me quote him back a figure on prices. Is he not aware that electricity prices went up 18 per cent in one week? Forget 60 per cent in the time span he is talking about; they have gone up 18 per cent in one week. Why? Because we have been reliant on fossil fuels imported from other countries, with no control over security of supply.

With due deference to his great knowledge and to his great achievements as an Energy Minister and in the Treasury, he must be aware that there has been no investment in the energy infrastructure of this country in the past 20 years. The Government of which he was part and the previous Government were part of that.

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He must at least give credit for the fact that we are about to embark upon a massive investment and that, in order to establish an investment, you have to set out a pathway on which people have clarity for their investment.

My noble friend has quoted various institutions to me, and I would like to make him aware that we have consulted and discussed this with every energy supplier in the country and with a wide range of people. By and large, as much as one can possibly tell, this has been universally applauded by the industry and those who are seeking to invest. We may be proven wrong but, at the moment, it is all looking quite good.

Lord O'Neill of Clackmannan: The Minister has to take some credit for making another stab at market reform. It is not the first one for 20 years; there were two in the late 1990s-the NETA and BETTA reforms-so he is wrong to say that nothing has taken place in this matter. However, those reforms are now out of date. We need reassurance for investors and I think that, to an extent, we will get that from this document. However, I am not sure whether the social dimension and the cost to the consumer will necessarily be given equal weight.

The emission performance standards rely heavily on carbon capture and storage being realised-taken out of the laboratory, on to the factory floor, produced and then adapted for use in power stations with turbines in excess of 400 megawatts-but that seems to be a long way away. I worry that, come 2015 when we have the large plant directive, we will deny ourselves access to coal-fired power stations and will not have CCS available by that time. We could, therefore, well have a dash for gas on the scale that we had in the 1990s, with all the price implications that the Minister has already stated. When does the Minister expect carbon capture and storage to be available to British power generators, and particularly to the coal-fired industries? Unless we get that assurance, this will be, in large measure, a pipe-dream of the Government. I say that more in sorrow than in anger. We need to have a clearer indication of when we are likely to get carbon capture and storage. My inclination is that it will not come before 2020 at the earliest.

Lord Marland: The noble Lord, Lord O'Neill of Clackmannan, is an expert in his field. He also knows that I am responsible at the moment for leading the negotiation on carbon capture and storage. I am delighted to make the Statement in your Lordships' House because it withdrew me from the negotiation process where we are in something called lock-in at the moment. I will not venture to suggest the outcome of the negotiations. They are extremely determined and it is a very complex programme. At the moment, we have three energy providers and me in one room at different times trying to bottom out where we can get to. I have been set the task of achieving this in operation by 2016. We may or may not get there. I am not going to predict one way or the other because it is a quantum leap. We must not underestimate the extent of that.

The noble Lord is quite right that a number of our energy policies are predicated on carbon capture and storage-but by no means all of it. The fact is that the

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EPS provides for gas. As my noble friend Lord Lawson would ask me to say, gas is fundamental to the future. I completely support his view on that. It is much less carbon intensive, will be fundamental to our electricity generation going forward and will be a large proportion of it.

Lord Teverson: My Lords, I generally welcome this Statement and the reforms that are there, in two areas particularly. We have often said in the House that if we had a proper carbon price that managed, in the jargon, to internalise the externalities of the cost of carbon we could then just let the market get on with it. Unfortunately, the EU ETS has not managed to deliver on that sufficiently. I understand that we only have a carbon price floor here for electricity generators. At least that is a move in that way.

I also particularly welcome the emissions performance standard. I have argued for that for ages and could never understand why, if we have emissions standards for cars and various other implements that we buy, we do not have them for the largest energy users such as power stations as well. I am not so concerned by a short-term dash for gas as long as that supply is diverse rather than concentrated in terms of our energy security.

I want to ask the Minister two things. He is absolutely right that the real risk to pricing is fossil fuels but it is also to a degree market concentration. How will these reforms make sure that there is less concentration of market power in the energy industry and how are we going to make sure that there are new entrants that can grow substantially to challenge that existing power? In terms of the market mechanisms, is he confident that there will be enough liquidity in the markets to make sure that these contracts for difference and that whole mechanism will work, so that we are able to deliver the policy objectives as he wants?

Lord Marland: My noble friend Lord Teverson has always asked the apposite question. First, we want to get away from the language of a "dash for gas". Gas will be fundamentally important. We are not dashing for it. We have to make sure that we separate the price of oil and gas. Gas is now a very competitive energy product, as we have noticed in the USA where shale gas has been discovered. We do not want to call it a dash for gas. It is long-term support for gas.

As to the market mechanism, Ofgem will be tasked with bringing liquidity into the market as the regulator. It has got to show some teeth in generating regulation. You get there by people generating their own electricity and feeding into the market on the one hand, and on the other requiring less from the electricity providers by having energy-saving products such as the Green Deal and smart meters-part of the programme that we have been pretty unified in wanting to adopt.

Lord Jenkin of Roding: My Lords, I will be quite short but can my noble friend answer one or two questions? First, we have waited a long time for this Statement. As I understand it, the reforms will require legislation. When are we likely to see the Bill? Secondly, he referred to the various forms of energy generation

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but I am a bit disappointed that we have in this White Paper a framework for renewables when we also need a framework for nuclear-my noble friend will realise that the Select Committee is currently looking at this. While I welcome the regular statement that is put out by Ministers on the importance of nuclear, there is huge doubt at the moment about what is going to happen after what they call the interim date of 2025. This is certainly affecting the idea of any investment for the future.

Finally, my noble friend referred to the need for new institutions to administer the FIT with contracts for difference, and also the new capacity payments. Can he give us a little more indication of what form those institutions might take? They are clearly going to perform a very important role in the new market structure that the White Paper foreshadows.

Lord Marland: As ever, the noble Lord, Lord Jenkin, knows the subject. I am slightly disappointed that he does not believe that there is a nuclear framework. We announced that there are to be six new nuclear power stations and reaffirmed that announcement two weeks ago and the sites where they will be located. Realistically, there are a number of issues in terms of the balance sheets of some of the companies wanting to invest-as we have seen from the fall-out in Germany. Having spoken with EDF, Iberdrola and others this week, I know that they are very committed to the cause of the nuclear framework.

As to when the legislation will happen, we are obviously hoping that it will start at the end of this year. There are some timing issues, even with getting the first Energy Bill back to this House-as we all know. The legislation issue will be difficult because there is a certain logjam in the other place.

On who will operate and regulate the supply, this will largely be Ofgem, which will have greater teeth. As we are running a little bit out of time, I am happy to discuss at a later time with the noble Lord the various component parts of that rather than going into it now-if he is happy for me to do so.

Lord Reay: My Lords, this is an extremely important White Paper-

Earl Attlee: My Lords, it is the turn of the Labour Benches.

Lord Boyd of Duncansby: My Lords, I want to ask one question, relating to the position of the devolved Administrations, particularly Scotland. The renewable obligations are executively devolved to Scotland and that has enabled the Scottish Executive-now the Scottish Government-to shape that as they wish. What role does the noble Lord anticipate that the Scottish Government will be able to play in the new feed-in tariffs with contracts for difference? What will be the relationship between the Scottish Government and the new institutions that he talked about?

Lord Marland: Naturally, we work very closely with the devolved Governments. We are all travelling down the same path. However, HM Treasury, rather than

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the Scottish Government, will be responsible for the renewable heat incentive funding. That is in the spirit of the union, I think.

Lord Reay: My Lords, this extremely important White Paper sets out to introduce the reforms, if one can call them that, which the Government consider are necessary if they are to meet their targets for extremely high-cost, heavily subsidised renewable energy. I hope we will get the chance to debate it.

I have just one question for now. The Statement mentions offshore wind on three occasions but makes no mention of onshore wind. Can we take it that the Government are lowering their sights with regard to onshore wind and, it is to be hoped, abandoning their targets altogether? It is a deeply unpopular form of renewable energy, it bitterly divides local communities and it is destroying some of our finest countryside.

Lord Marland: I do not think my noble friend can take that from our Statement. The reality is that onshore wind does divide communities-my noble friend puts his finger on it-and it therefore becomes an issue for local communities to decide through the local planning process whether they want it. A large number of local communities in Scotland are embracing onshore wind whereas a number of communities in this country-I am sure my noble friend Lord Reay's community is one of them-do not want to embrace it. The reality is that the Government have a target. Two-thirds of that target for onshore wind is either met or is in the process of being met so there is a very limited amount of headroom. Our real push is to get offshore wind up to the target we wish to achieve.

Lord Dixon-Smith: My Lords, I hesitate to intervene but there is one thing I need to say and one question I need to ask. We should stop worrying too much about cost. I have said this before but I have seen farm tractor diesel prices rise by well over 4,000 per cent since I started in business. That has been vexing occasionally. It is always difficult to put up with rising costs but we live in a different world. This is an evolution in costs over a similar period. If we can keep the costs down below that sort of increase we shall have done very well indeed. That is a harsh reality which my noble friend Lord Lawson may find uncomfortable. However, when he was Chancellor of the Exchequer, he may have had something to do with what has happened.

The Minister is essentially setting out a programme through until 2030. The difficulty is that the major infrastructure investment he requires will consist in many instances of projects which will still be running in 2050, by which time we shall have to have a carbon-free, or virtually carbon-free, energy industry. There will still be one or two essential uses. What is the Minister going to do if he finds that the 10 per cent of the carbon which still has to be emitted in a coal-fired power station is incompatible with the 2050 target when he is committing a 40-year investment? That is what it will be if he gets someone to build a CCS power station today.

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Lord Marland: My noble friend Lord Dixon-Smith asked me what I would do in 2050 if we had not reached our targets. By my calculation I will be about 90 so I will either get on the plane to Switzerland or I will not worry about it because I will not have my marbles to worry about it.

On a serious note, it is very impressive that all of us in this Room are thinking about the next generation and the supply of electricity and how we are going to get to it. I take issue slightly, but not with the sentiment, that we have to stop thinking about prices. We have to think about prices. It is absolutely fundamental that we find ways of keeping the country competitive with the rest of Europe, as we are at the moment in terms of our prices, and that electricity and energy are affordable to the people of this country. However, I think the fundamental point my noble friend is making is that prices are going to go up, they do go up and they have gone up. It is a fact of life, unfortunately, but it is incumbent on government to ensure that the cost to the people of this country is as low as possible and is mitigated as much as possible.

Localism Bill

Committee (7th Day) (Continued)

7.55 pm

Amendment 148

Moved by Baroness Greengross

148: After Clause 95, insert the following new Clause-

"Local development: survey of area

(1) Section 13 of the Planning and Compulsory Purchase Act 2004 (survey of area) is amended as follows.

(2) After subsection (3) insert-

"(3A) The local planning authority shall undertake and publish a numerical assessment of the level of housing need and demand for all age groups in its area, together with its proposals for addressing such need and demand including plans relating to the provision of housing across all types and tenures.""

Baroness Greengross: My Lords, localism and the Localism Bill present many opportunities for people of all backgrounds and all ages to be involved in local decision-making and developing their neighbourhoods. I declare an interest as heading up a think tank, ILC-UK, which looks at the impact of demographic change on all our lives. Some of the research ILC-UK carried out showed that opportunities in the Bill may benefit only those who already enjoy an advantageous position in society and may not adequately protect and demonstrate the needs of those who are marginalised, particularly older people. Given that much of the development of new homes and communities is going to depend on neighbourhood development plans, which will be voted in by the local population, there is a danger that these plans may not adequately reflect the needs and wishes of marginalised groups in the local population.

Amendment 148 therefore seeks to strengthen the requirement for local authorities to produce adequate assessments of the housing needs of their local population.

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If they are to do this, it is essential that they have robust social and demographic data-they are certainly not going to make informed decisions about future housing provision without those data.

Section 13 of the Planning and Compulsory Purchase Act 2004 lists what councils should look for when producing housing need assessments. It states that an authority must keep under review matters that are likely,


However, this piece of legislation has had very limited impact-indeed, in some cases it has sadly been completely ignored. One example of the failure to assess adequately the demand for new homes at a local level relates to the housing needs of older people.

I will quote two examples that were outlined in a recent report by the National Housing Federation. The Audit Commission's review in 2010 of a sample of 112 local authorities' financial plans showed that only 10 per cent made any estimate of the financial impact of provision for increasing numbers of older people despite a rapidly ageing population, as I think everyone will acknowledge. In October 2010, the National Housing Federation surveyed local councils on older people's housing strategies-153 councils responded to the survey but 32 per cent of them had neither a strategy nor plans to develop one. This is partly because in many cases local councils do not include in their plans the need for retirement housing, even though the ageing population is rapidly expanding. Certainly the largest provider of retirement accommodation in the country, McCarthy and Stone, believes that is the case. Fulfilling the need for retirement housing would be a very good way of getting underused housing vacated for the use of the younger generations who are having great difficulty in getting on the housing ladder, but in order to do that we have to provide specialist housing for older people.

Localism will rely on the correct evidence base being in place, so it is essential that councils are required to produce those data. Without strong guidance provided by central government, the examples quoted here show that local authorities will continue to struggle to produce robust housing needs data. Amendment 148 seeks to address that problem. I beg to move.

8 pm

Lord McKenzie of Luton: My Lords, we have Amendments 148ZZA and 148ZZZBA in this group, but they are consistent with the amendment moved by the noble Baroness, Lady Greengross, which we support. They have been proposed to us jointly by Shelter, the TCPA and the National Housing Federation. These amendments would help to ensure that local authorities produce a robust and public assessment of housing needs to inform local plans. Amendment 148ZZA requires housing needs to be addressed in the local development scheme, while under Amendment 148ZZZBA the LPAs must regularly survey their areas and publicise the results.

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Local plans must integrate land use planning, housing strategies and delivery. While the national planning policy framework, when it appears, may help to promote this objective, we think that this issue is too important to leave to regulations and guidance. All local authorities should be required to undertake a strategic assessment of housing need and demand to provide the necessary evidence to inform the development of housing strategies and planning policies for their areas-the points raised by the noble Baroness cover this-and the needs of an elderly population that is growing older.

The information should be key to determining the amount of housing required, including affordable housing and housing specifically designed for people with care and support needs and in allocating a sufficient amount of land to meet and identify housing requirements. Bodies such as Shelter, the TCPA and the National Housing Federation have welcomed a more localised approach to planning and see the reforms to the planning system as an opportunity to allow local people to play a more active role in shaping development in their area by helping to shape local plans and hold their local authority to account.

In order to enable local people to play a more active role, it is vital that they have access to data that give them as full a picture as possible of the housing situation in their area and enable them to assess their local authority's performance. Through local authorities setting out clearly in the local plans how they plan to address housing need, local people will be far better placed to hold their local authority to account on the success that they have achieved. Without clear aspirations being set, local people are likely to find it difficult to assess how well their local authority is performing.

The importance of providing access to good local data was outlined in the Conservative Party's Open Source Planning paper, which sets out that in developing their local plans, councils will be expected to ensure as a minimum,

The introduction of more consistent data sets will also allow local authorities greater opportunities to increase integrated working across areas such as sharing back office staff. That would be particularly useful in some areas of local housing planning, but varying data sets would make the practicalities of joint working more difficult. This will help to deliver the aims of a more localised system by ensuring that local people are able to play an effective role in shaping local plans and holding their local authority to account while enabling local authorities to work together more efficiently.

In Committee in the other place, the Minister stated that the Government would require from local authorities,

However, he argued that Section 13 of the Planning and Compulsory Purchase Act 2004 already outlined the necessary duty. In fact, with respect, Section 13 does not consider a critical element of housing need,

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or other needs, which is a forward projection of future need and demand. In the absence of such a clear duty, it would be easy for some local authorities to look narrowly to immediately presenting housing need and to avoid responsibilities, especially to the next generation and to the wider housing market. It is on that basis that I propose these amendments and support the amendment of the noble Baroness, Lady Greengross.

Earl Cathcart: My Lords, forgive me if I am wrong, but I thought that all councils were already required to make a housing needs assessment under the existing PPS3. If that is the case, I am not sure what the amendments will add other than to make councils do their job better.

Lord Best: My Lords, I give qualified support to Amendment 148 in the name of my noble friend Lady Greengross and to Amendments 148ZZZA and 148ZZZBA tabled by the noble Lord, Lord McKenzie. My support is qualified because the words,

are not popular in local government circles. I would find it hard to be entirely supportive of extra obligations being placed by central government on local authorities, but I am supportive because noble Lords are absolutely right that collecting local data on housing markets and making them available, not least to any neighbourhood preparing a neighbourhood plan, as well as to the local authority preparing its local development plan, is more than just good practice; it is essential if housing providers are to meet local needs and demands.

To take the example of the area of interest to the noble Baroness, Lady Greengross, if the local authority's assessment shows that many thousands of family houses are occupied by one older person or an elderly couple, with the certainty that all those occupiers will grow older in years to come, clear signals can be given to private house builders and housing associations that there is a big market for attractive, manageable, economical apartments that are tailor-made for older people to buy or rent.

I give full backing to the intention behind these amendments and hope that their objective of getting local authorities to do what they should can be fulfilled, not least through the national planning policy framework, even if that objective is not accomplished by a new obligation on local authorities.

Lord Beecham: I hesitate to express a slightly different point of view as a vice-president of the Local Government Association from our esteemed president, but I am not quite as reluctant as he is to see this kind of duty, as proposed by the noble Baroness, Lady Greengross, and my noble friend Lord McKenzie, incorporated into the law, particularly given the state of the housing market in general and the huge unmet demand for housing, particularly affordable housing. It is important that all authorities recognise that there is a need to promote the provision of more accommodation. It is noticeable that since the disappearance of the regional spatial strategy, something like 200,000 houses it is estimated will no longer be built that would have been built had those plans been progressed.

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I add one further dimension to the prescription from the noble Lord, Lord Best, for encouraging new building. I entirely agree with him that it is very desirable for private builders and housing associations to help to cater for the needs of an increasingly ageing population and indeed others. To that I would add local authorities themselves. That might be something that they would appreciate. Perhaps as a quid pro quo for having the extra responsibility of drawing up plans for affordable housing, the fact that they might actually be able to provide some themselves might be an additional incentive. I hope that sweetener will persuade the noble Lord, Lord Best, that his qualification might safely be abandoned.

Lord Whitty: My Lords, I support the principles of the amendment proposed by the noble Baroness, Lady Greengross. A whole section of this Bill later on in Part 6 deals with social housing and changes many of the existing arrangements for tenure, what the local authority is obliged to provide and tenants' rights. Some of them I support and some of them I strongly oppose. However, the whole point of a social housing strategy is that it relates to the totality of the housing need in the area. Unless there is a provision somewhere in this Bill, such as the provision suggested by this and related amendments, dealing with social housing in the abstract is nonsense.

All forms of housing tenure are in crisis. We know that a lot of people who would have got a mortgage by the age of 30 now can no longer get a mortgage until their late 30s or even into their 40s. More and more people are having to rent in the private sector and are being delayed in setting up an independent household. We know that the rate of household formation is growing because of various developments in society, but it is growing at twice the rate of new build housing. We therefore have to have an holistic approach to housing need, area by area. If we are not going to achieve the targets through the regional spatial strategies, which I admit were a bit Stalinist in their approach, we have to ensure that the local authorities themselves take responsibility for looking at housing need in their areas and assessing it against their private sector development plans and the social housing that they and the housing associations in their areas can provide.

Somewhere in this Bill we need to tell local authorities that part of their responsibility from now on must be assessing total housing need against costs, against price and against demographic trends. That is not covered by the 2004 Act in sufficient detail. Given what I would regard as something close to a crisis in the housing market in all forms of tenure, I think it would be appropriate for us to set that out in the Act. Then, when we consider the social housing provisions, we can set them against a requirement for every local authority to assess needs, supply, demand, price, and demographic and employment changes, and to set its social housing targets and provision against that background. Unless we do that, social housing is isolated and is a residual form of housing based on what is already there. It does not relate to the needs of the totality of the community in which local authorities operate. If the Government are prepared to accept the

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noble Baroness's amendment here, they need to say that at least somewhere in this Bill, and we need to ensure that local authorities behave accordingly.

Lord Taylor of Holbeach: My Lords, this has been a very useful debate. I do not think that the Committee is very far apart on the essential importance of housing and making housing one of the key ingredients of the planning process. I thank the noble Baroness, Lady Greengross, for the typically intelligent and sensitive way in which she introduced her Amendment 148 and led the group.

The amendments that we are considering include those of the noble Lord, Lord McKenzie, which seek this numerical assessment by a local authority of current and projected housing needs, the balance of affordable housing and proposals for addressing those needs in local development schemes, which are the documents setting out the programme and timetable for producing plans. Also required is the publication of annual reports of the matters reviewed and the changes proposed to implement local plans, and the publication of a review of a range of environmental, social and economic issues specified in the Planning and Compulsory Purchase Act 2004 prior to preparing its local plan. As I said, I do not think that we are a million miles away on the objectives.

8.15 pm

I hope that I will be able to satisfy the Committee that the provision in the Bill is adequate and will achieve what we are all seeking to do. I fully agree that local authorities should understand and plan for the differing housing needs of people of all ages in their area, including the elderly population, families with children and people in need of affordable housing. Affordable housing plays an important role in creating sustainable communities and our economy. Good quality housing for people in later life can promote health, well-being and independence and reduce the need for costly care. From what they have said, I think that almost all noble Lords would support the efficacy of extra care housing, as advocated by the noble Lord, Lord Best, in meeting a targeted need in this way. Strong strategy provisions already exist in the Planning and Compulsory Purchase Act 2004, as noble Lords have said. Section 13 of the Act requires local planning authorities to keep under review matters that affect the development of their area, including the size, composition and distribution of the population in the area. This is a strong starting position from which to plan effectively for the needs of different groups of people.

National planning policy in this area is well understood and accepted. We intend to strengthen policy in the review that we are undertaking. As my noble friend Lord Cathcart said, planning policy statement 3 and its associated detailed guidance on strategic housing market assessment make it clear that local authority plans should be informed by a robust evidence base of housing need and demand in its area for market and affordable housing.

The noble Lord, Lord Whitty, is right: local authorities must look at housing policy in its totality-I think he used the word "holistic". Local authority plans

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should consider a range of issues including demographic trends and the accommodation requirements of specific groups, particularly families with children, older people and disabled people. Section 19 of the Planning and Compulsory Purchase Act requires local planning authorities to have regard to national policy when preparing development plans in their area. The requirement to monitor and report annually on the implementation of their housing policy already exists in Regulation 48(7) of the 2004 regulations for local plans. Councils,

Regulation 48(6) makes it clear that this number is,

That is a long-standing arrangement that councils agree with and which we are not changing. However, we want to strengthen the arrangement further and already propose to include a requirement to report on affordable housing as part of our new streamlined regulations, which were placed in the House Library this week for information. We want local authorities to be held to account for their performance by their communities, and the Bill will remove top-down involvement by Government as councils will publish information direct to the public in the interests of transparency and accountability.

Lord McKenzie of Luton: Would the Minister repeat what has been placed in the Library this week? Was this today or yesterday? What notification has been given of that?

Lord Taylor of Holbeach: I am sorry, my Lords, my notes here say that it was placed in the House Library this week for information. Indeed, I think that I referred earlier to draft regulations that have been placed in the Library this week for the information of noble Lords. I hope that that will inform this debate. We are going on to debate housing, though probably not this evening, so noble Lords will have an opportunity to swot up on those.

The noble Baroness, Lady Greengross, mentioned neighbourhood planning. She wanted to know how it would protect minority groups. Neighbourhood plans will be tested at an independent examination and must have regard to the national policy and be in line with strategic elements of the local plan. Everyone has the right to be heard at the examination, and human rights issues can be considered.

I come to the point made before we broke by the noble Lord, Lord McKenzie, about two authorities with some tension trying to deal with an issue that was affecting their neighbourhoods. Compliance with the duty to co-operate is assessed through the independent examination of draft local plans, and failure to demonstrate satisfactory compliance risks the local plan failing the examination. Having no local plan means that councils lose control of how their area will develop. This disfranchises their constituents, who will hold them to account, as I said in my previous comments.

I would like to correct something that I said. When I said that the draft regulations had been put in the Library this week, I meant last week. Unfortunately, we are all suffering from a slight sense of jet lag as the Bill is moving with such rapidity through the House.

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The noble Lord, Lord Beecham, mentioned the low housing build. I am sure that noble Lords opposite will reflect on the fact that this extends back into the period of the previous Administration. We must remember that the market for housing has suffered for reasons entirely unconnected with planning. However, the experience is that numbers in regional plans did not provide a reliable indication of the number of homes actually being built. We know that indicative planning at the regional level for housing need caused huge stress within the system.

We will shortly be publishing the new national planning policy framework, which reviews all national planning policy. I know that my ministerial colleagues understand and take seriously ensuring that the new policy framework makes clear the need for local authorities to understand the housing needs of all people in their area and to monitor the effectiveness of their policies. We will shortly be consulting on the draft of the framework, and will listen to all the views on this and other areas to ensure that the policy is as strong as it can be. I hope that that encourages the noble Baroness and that she will feel free to withdraw her amendment.

Lord McKenzie of Luton: Before the noble Baroness answers, can I thank the Minister for alerting us to the regulations which have been posted in the Library? It is very difficult to keep abreast of what is going on in this Bill. We had some government amendments tabled yesterday of which we had no prior notice and it does not help an expeditious focus on the Bill.

Those, together with the NPPF, as soon as we get it, will reassure us on some of these points, although we would like to see this obligation embodied in primary legislation on the face of the Bill. My noble friend Lord Whitty encapsulated a debate which we will have more intensely in due course about the problems and challenges in respect of housing in the UK at the moment. Regional spatial strategies are not necessarily flavour of the month but, if you look at the record, there were years when they were beginning to deliver. If you look at 2007-08, we had the highest levels of house building for something like 20 years, just as that process was beginning to get under way.

I am grateful for the support of other noble Lords who have spoken and I am still unclear about the central issue of when you have a dispute between neighbouring authorities over housing provision and how, in terms of the examination of the plan and whether that plan is sound, those judgments will be made. I reiterate the point so that the noble Lord might reflect on it and possibly write in due course, certainly before Report. If you have two authorities which are at odds and take a different view, does the examination of the plan have to take a view as to which of those two authorities might be the most reasonable in their approach and therefore influence the outcome, or is that process in terms of co-operation just looking at whether each party played the game?

Lord Taylor of Holbeach: One of the things the Bill provides for, as we have just discussed in Clause 95, is the duty to co-operate. It is not a light thing; it is a duty. I mentioned in the précis I gave in response to

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the noble Lord that there are sanctions against authorities whereby they run the risk of their local plan failing the examiner's test. If the noble Lord would like me to write to him specifically on that I will do so. I apologise if communications have been such that he has not had the usual courtesies extended in terms of being informed about government amendments.

Baroness Greengross: I thank noble Lords who have supported this amendment and the Minister for responding in the positive way that he has. This is broader than social housing and, although I am really pleased to hear that everybody agrees that local authorities must know the facts in order to meet the needs of the local population, something is not working at the moment, as the examples I quoted demonstrate. Because there is so much good will towards getting this right, I hope that that is going to happen, with the work that is going to be undertaken and with the commitment of the Minister and the Government to get this right. I reserve my judgment as to whether anything needs to be taken further but, in the mean time, I thank noble Lords again and beg leave to withdraw the amendment.

Amendment 148 withdrawn.

Clause 96 : Local development schemes

Amendment 148ZZZA not moved.

Amendment 148ZZA

Moved by Lord Cotter

148ZZA: Clause 96, page 74, line 15, leave out subsection (2) and insert-

"(2) For subsection (3) (requirements as to preparation of schemes) substitute-

"(3) The local planning authority must have regard to sustainable development and Town Centre First Policy, as defined in accordance with subsection (3A).

(3A) The Secretary of State must lay before Parliament an order to define sustainable development and Town Centre First Policy.

(3B) A statutory instrument containing an order under this section may not be made unless a draft of the instrument has been laid and approved by a resolution of each House of Parliament.""

Lord Cotter:My Lords, this amendment addresses the issue of keeping trade local. I am sure many Members, Ministers and others will be aware over a number of years that there have been sustained campaigns on this issue of keeping variety and choice for the consumer, the issue of protecting small shops and the issue for people in business as well as the local community of having choice.

The Federation of Small Businesses carried forward a strong campaign, including coming to Parliament, lobbying and getting a lot of support for this. In the light of this very large Bill, which we are struggling to get through in time, I could speak at great length on this issue, although I will not. However, it is a very big and important issue.

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8.30 pm

I shall say a few more words, hoping that the Minister will accept that this is a big issue that has been running for many years. We see the decline of town centres gathering pace. This amendment looks for statutory protection for a diverse, sustainable high street. No one can deny the need to keep our high streets and town centres vibrant and alive. Week by week, over many years and currently more than ever, we learn through our newspapers and the media generally how many town centres are withering away.

I do not expect many Members here tonight to have studied a Bill that I introduced, the Retail Development Bill. It passed through this House and I now have it in my hand. It was printed in January 2008. It more widely addressed the issue that I have just talked about in lots of different ways. That Bill was the result of my campaigning over many years on behalf of small shops and the support that I got from the community. I hope the Minister will at some stage perhaps at least refer to that Bill, which is far broader than the amendment I am moving tonight. Notwithstanding that, and for the reasons that I have given, I have tabled it because there is a great need to protect our local shops.

Without saying much more about it, I say to the Minister that the amendment deals with only a small part of the Bill, which is very comprehensive. However, I maintain that in one way or another, this amendment, addressed to this specific issue, is absolutely vital. I would be doing less than the duty that I feel to the community and its shops if I did not press forward with the amendment, and hope that this could be addressed in some way at some stage. It is, as I say, so important. On that basis, I beg to move.

Lord McKenzie of Luton: My Lords, we have tabled Amendment 153AKA in this group. It requires the local authority to prepare and maintain a retail diversity scheme as part of the local development scheme. It calls for a sequential approach to the development of a hierarchy, putting existing centres first, followed by edge-of-centre locations and then out-of-centre sites. This is very much consistent with the amendment of the noble Lord, Lord Cotter. I was interested to hear about his Retail Development Bill, which I must confess I have not studied in detail, although it seems that neither has his colleague who is sitting in front of him. Perhaps he has. Maybe I could borrow a copy during the Recess.

The amendment will be familiar in that it is a rerun of what was proposed in the other place. On reflection, we should have deleted the proposed power of direction for the Secretary of State. We have brought it back because it was spoken to warmly by the Minister, Greg Clark, who said:

"Policy on town centres has always been part of national planning policy ... I wish to signal clearly the importance of having robust policy, including the sequential test that is currently in planning policy statement 4. That will absolutely be in place, and it will be clear in the new national planning policy framework".-[Official Report, Commons, 17/5/11; col. 270.]

It is difficult for us to test that issue because we still do not have the new NPPF, but we live in hope.

The amendment of the noble Lord, Lord Greaves, which he has not yet spoken to, requires there to be an assessment of,

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and makes it necessary,

The noble Lord's amendment states that there must be a consultation, including with the traders. So far as it goes, we can and will support that amendment, but it is vital that there is clarity on the sequential approach. The existing vitality and diversity of shopping centres can dramatically be undermined by inappropriate out-of-town development.

I should recall that I spent a brief time as a Minister in CLG at the tail end of the previous Government, as well as trying to cope with DWP issues. As the noble Baroness, Lady Hanham, will know, you are allocated planning issues to look at when they come forward, one of which stuck in my mind. There was a proposal for a significant retail development in an area, which would have been fantastic for that area in terms of jobs and the retail offering but would have destroyed three or more shopping centres in close proximity. There is an issue about how the duty to co-operate will work in such situations where there is a retail opportunity in one local planning area, which is substantially in the interests of that area, but could be of real detriment to other areas. We will follow with interest these issues around what the NPPF says and the extent to which that overlays local development plans.

The noble Lord, Lord Cotter, referred to the current situation on the high street. It is in a pretty dire state. Some 12,000 shops closed their doors in UK high streets last year, and 85 per cent of people feel less optimistic about the prospects for economic recovery when they see boarded-up shops in their local high street. In the past fortnight, Jane Norman went into administration, Carpetright shut 75 stores, and Habitat put 30 premises outside London into administration. Retailers Homeform, HMV, Comet, Mothercare, JJB Sports and Thorntons have recently been hit. Local Data Company states that 14.6 per cent of retail premises are now vacant. This indicates that approximately 50,000 units are not currently open to business on the UK high street, which shows just how challenging the situation is on the ground.

This matter is particularly relevant at this point for the economy of our country, and demonstrates that we need to do whatever we can through the planning process, as well as through other means, to preserve, protect, encourage and promote development on the high street. That is the purpose of these amendments, and I hope that the Minister will support and accept them.

Lord Greaves: My Lords, as the noble Lord, Lord McKenzie, said, I and my noble friend Lord Tope, have tabled Amendment 153AKC, which proposes a new clause, entitled,

"Health and diversity of town centres and high streets".

Before speaking directly to that amendment, I should first acknowledge the work of my noble friend Lord Cotter in this area over the years. He has been determined and diligent in pursuing these matters and is to be congratulated on bringing the amendment. It is true to say that the three amendments in the group are all rather different but address the same basic problem. I

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am sure that if the three of us sat around a table, we might well have been able to come up with an amendment with which we all agreed and which would combine the best of all three amendments.

The amendment that I am proposing is slightly different because, unlike the others, it concentrates not so much on town centres but on town centres and high streets. That is not to say that town centres are not important-they are vital-but the shopping streets that we are talking about are not just in town centres. My amendment, which internally we are calling the "Cambridge amendment", comes from campaigners in a part of Cambridge called Mill Road-a shopping street that is not part of the town centre but is a district shopping street of great variety that is under threat. It was the suggestion of the campaigners that resulted in us putting this amendment together. It clearly overlaps with the other amendment.

I want to speak to Amendment 153AKC, which relates to Section 19 of the Planning and Compulsory Purchase Act 2004 about preparation of local development documents. I want to include an extra section in that, saying, first, that the duties in putting together the development documents should include,

Secondly, that:

"When preparing local development documents and other local planning documents the local planning authority must consider the results of that assessment and consider whether to include appropriate policies to promote the vitality and diversity of those shopping areas".

Thirdly, that:

"The local planning authority may prepare a scheme for retail vitality and diversity which may be a local development document or other local planning document".

The policies that we set out are similar to those in the amendment from the noble Lord, Lord McKenzie, but a little different.

The local planning authority may,

In doing this, it must consult with the local community, which includes the traders in each shopping centre, and a shopping area means an area of town centre or high street where the substantial use is retail. So sustainability and diversity, which we are suggesting should be foremost in these policies, means that there is an appropriate balance of independent and multiple traders, of unit sizes, and balances of classes of use.

We are putting the emphasis on what is there now. The Labour Party amendment, if I can put it that way, talks about the importance of maintaining the existing policy of the sequential test. If there is a proposal for a new supermarket, can it be fitted in the town centre, can it be at the edge of the town centre, can it be at the edge of town, or does it have to be in the countryside? It is very important that that is maintained, but it is not the only important thing. If you are having a new supermarket, or even a new relatively small Tesco- or

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Sainsbury's-type store, like a Tesco Express, the issue is not just where it is, but the effect it will have on the balance of shopping in its area.

In some areas, it might do more damage if it is in the high street than if it is 10 miles away in the countryside. According to a campaign there, Mill Road in Cambridge is described as having an eclectic range of small, specialist independent retailers; as the most ethnically diverse part of the city; and as Cambridge's Brick Lane. A Tesco Express opened some time ago to widespread concern, and now a Sainsbury's express wants to open on the other side of the bridge. The fear is that this will seriously undermine the independent local shops, which are a combination of ordinary food shops and specialist shops. If the food element comes under intense competition, those shops might then become unviable. It is suggested that policy and guidance is changed so that the local planning authority can take much more vigorous action to take these issues into account and, if necessary, turn down planning applications if they are thought to be detrimental to the diversity and vitality of a particular high street, whether in the town centre or elsewhere.

This is not just a Cambridge issue. We all saw on television the remarkable scenes in Bristol, where there were riots at night that apparently were connected with the opening of a similar type of convenience store in a street there. For those who live in relatively small towns, as I do, the vitality of our town centres is a very similar issue. In my own town of Colne, there are a lot of small independent shops, and maintaining that vitality and diversity means that we need the policy handles to be able to resist developments that, even if they are in the town centre and high streets, could be detrimental to their future.

Again, that is a very localist view, because it will put more power in the hands of the local authority and local people. There is no magic answer. Keeping the shopping centre and the high street going requires hard work not just by the traders but by the whole community, but it can be done. There are examples around the country where it is being done, and we need to do what we can to stop that being undermined.

8.45 pm

Earl Cathcart: My Lords, I agree with the sentiments of what everyone has said so far. We must revitalise town centres. We have all learnt from the mistakes of out-of-town shopping, with its free car parking. In Fakenham, in Norfolk, when a new shopping centre opened about 15 or 20 years ago, within six months, 26 town-centre shops shut. That was very sad, and it is very difficult to get them back again. The other mistake made is that too many councils charge for town-centre car parking. That is daft. If you want to encourage people to use the town centre, make it as easy as possible for them to pop in there, go to the bank and then go into the butcher, baker and candlestick maker without any car parking charges. That is an irritant. Those who charge are being very shortsighted.

Lord True: My Lords, if my noble friend wants to come to our high street, he can have 30 minutes of free parking. The Mill Road story, to which my noble

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friend referred, is extremely interesting. Unfortunately, the Tesco Express, which was its original focus, was successful. There are defects with all the amendments before the Committee; I hope that my noble friend will not feel that all of them have to be addressed.

I was very encouraged by what was said in the other place. One difficulty is that not everyone has the same view of vitality. My predecessor as leader of my council from another party said that he would be delighted if he heard that a Tesco was opening in his area, because it would bring people to that shopping area. We must address head-on the nature of the retail multiple and the manner of the high street. Can my noble friend assure us that before we finish examining the Bill, when we have seen the national framework, Parliament will give local authorities real power to deal with the problems which my noble friends, Lord Cotter and Lord Greaves, and the noble Lord, Lord McKenzie, raised? That is all I ask for at this stage, not a detailed commitment. I hope that my noble friend can give that assurance.

Lord Beecham: My Lords, I warmly endorse the thrust of the three amendments. It is clearly desirable to have a proper planning framework to encourage retail diversity. However, although that is necessary, it is not a sufficient condition of ensuring that we get retail diversity. There are other significant considerations, particularly financial considerations and other policies which may militate against the achievement of the aspirations of the amendments-with which I entirely concur.

I can cite examples from my experience. When I was chairman of the development committee in Newcastle, I tried to persuade our partners in the city centre shopping centre-we were partners because we owned a substantial stake in it-to diversify the offer to try to get away from chainstores, which were pretty much all we had there, and provide for some niche retailing. Despite the fact that we were significant shareholders, I was totally unable to persuade them to do that.

In another example of the Tesco influence, in the west end of Newcastle adjoining a street in an ethnically mixed area with a lot of little local shops and one or two other retailers, Tesco has secured planning permission to build a largish store on the site of a former hospital. The hospital is very keen to get the money from it, for obvious reasons. I am afraid that council officials supported the recommendation, and indeed an inspector upheld the recommendation. So we have a Tesco store not far from the town centre that is likely to do serious damage to local shopping.

I fear there are policies that might encourage that kind of trade-off, where you are effectively getting a financial benefit-in that case for the hospital but in other cases for the local authority itself. Most of us welcome the proposal for tax increment financing but that puts a premium on promoting development that will generate significant rateable value on which you are then going to borrow. There will be a temptation, frankly, to push that kind of development at the expense of the kind of development that these amendments are interested in promoting, which is less likely to contribute hugely in terms of rates and certainly

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is more difficult to put together. So you potentially have a policy that might militate against the thrust of these amendments.

We are also now going to get a range of enterprise zones. I do not know if the Minister can tell us whether there will be any restrictions this time round on retail developments in the enterprise zones. As I understand it, it is pretty much carte blanche for whoever develops these zones. Again, I speak from experience-and there are other Members of your Lordships' House who will know the kind of damage that was done to city centre shopping in places such as Newcastle, Manchester, Sheffield and Birmingham by some very substantial out-of-town shopping developments in enterprise zones. Enterprise zones were originally designed to promote investment in manufacturing industry and so on. It would be unfortunate if again they were to be captured by the interests of large retail developers, thereby threatening diversity in existing centres.

These amendments are entirely on the right lines and I hope that the Government will consider them very seriously. However, I also ask them to recognise that there is a need to look at the other policies that impinge on this area and try to ensure that there is a sensible look across the piece at the implications of a range of policies on the objectives that these amendments seek to promote. Perhaps that is a debate for another occasion but I do not think that we can look at these things in isolation. We need to bring them together, and I hope that these amendments may help us start to do that.

Lord Taylor of Holbeach: My Lords, I thank all noble Lords for participating in this useful debate on this group of amendments, which has been informed by my noble friend Lord Cotter's Retail Development Bill and his experience in this area. I am very grateful to him for moving his amendment. As noble Lords, including my noble friend Lord Greaves, have said, the amendments in this group raise similar issues around town centre policy and retail diversity. The noble Lord, Lord Beecham, is absolutely right: a healthy retail economy is the most important thing in maintaining healthy town centres.

We understand and share the concern to ensure that developments should be sustainable. Planning has a key role in achieving this. The coalition's commitment to this should not be in doubt. We also acknowledge the value to communities of prosperous and diverse high streets. Town centres are key to sustainable growth and local prosperity. They are at the heart of neighbourhoods, giving communities easier access to shops and services. The noble Lord, Lord McKenzie, is right that the Government have already made a clear commitment in debates on this Bill in another place-and, as noble Lords will know, as part of the Budget-that we will maintain strong policies that put town centres first for new retail development.

Perhaps I can address the interest expressed by my noble friend Lord Greaves in Mill Road, which is no doubt an important local area in Cambridge. Local councils have many tools to support local shops-not just planning but business improvements districts and, under this Bill, neighbourhood plans-and to bring

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complementary developments to the area. There are levers available to assist within the armoury that local authorities have at their disposal.

However, I just caution noble Lords that there is a risk that these amendments are a backdoor attempt to get at supermarkets. We must be clear that town centre planning policy is not pro or anti-supermarkets. Planning cannot seek to restrict lawful competition between retailers; in fact, planning policy is, and has always been-under all Governments and under different controlling administrations of local councils-blind to whether the operator of a retail proposal is a supermarket or an independent. We want the right scale and type of development in the right location to meet people's shopping needs. That is the issue that we need to be addressing. That is what planning policy can support local councils to achieve in a more practical manner than legislation.

Perhaps I may deal with the point that the noble Lord, Lord McKenzie, made earlier, when he asked about the duty to co-operate in situations where the impact or influence that a development might have crosses local council boundaries. This is analogous to the housing issue. The duty to co-operate is not actually the main safeguard in this respect. Retail developments in one council area must be assessed for their impact on town centres in the catchment area. If catchment areas cross local council boundaries, it makes no difference-the impacts must still be assessed on the basis of the catchment area. This particular safeguard therefore already exists in planning practice.

Lord Beecham: My Lords, I just wonder about the definition of town centres. In an area such as Newcastle, the town centre is obvious, but in an area like Doncaster or Kirklees, where a number of towns are brought together under one unitary authority, what would be the definition of a town centre? I am sure that the Minister understands my point.

Lord Taylor of Holbeach: I think that I can help the noble Lord. Large centres of population have clearly identifiable city or town centres, but the outer suburbs usually have shopping malls and streets that are very important as neighbourhood shopping areas. We really want to be able to strengthen all these traditional shopping areas that people have been able to access. The whole purpose of this is of course to make sure that we do not lose the heart that lies at the centre of all our great communities. The issue applies just as much to a market town-or coastal town, as we were discussing earlier today-as it does to a large city. That is the focus. I will go on to say that the long-expected, shortly-to-arrive national planning policy framework will indeed make clear what our position is on that.

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