Hunt of Kings Heath, L.

Irvine of Lairg, L.

Janner of Braunstone, L.

Jones, L.

Jones of Whitchurch, B.

Judd, L.

Kennedy of Southwark, L.

Kennedy of The Shaws, B.

Kerr of Kinlochard, L.

Kestenbaum, L.

Kilclooney, L.

King of Bow, B.

Kinnock, L.

Kinnock of Holyhead, B.

Kirkhill, L.

Knight of Weymouth, L.

Laming, L.

Layard, L.

Lea of Crondall, L.

Liddell of Coatdyke, B.

Liddle, L.

Lipsey, L.

Lister of Burtersett, B.

McAvoy, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

Mackenzie of Framwellgate, L.

McKenzie of Luton, L.

Maginnis of Drumglass, L.

Mallalieu, B.

Martin of Springburn, L.

Massey of Darwen, B.

Maxton, L.

Mitchell, L.

Monks, L.

Moonie, L.

Morgan, L.

Morgan of Ely, B.

Morris of Handsworth, L.

Morris of Yardley, B.

Morrow, L.

Newcastle, Bp.

Noon, L.

Nye, B.

O'Neill of Clackmannan, L.

Patel, L.

Patel of Bradford, L.

Pendry, L.

Pitkeathley, B.

Plant of Highfield, L.

Ponsonby of Shulbrede, L.

Prescott, L.

Prosser, B.

Quin, B.

Radice, L.

Ramsay of Cartvale, B.

Rea, L.

Reid of Cardowan, L.

Rendell of Babergh, B.

Richard, L.

Robertson of Port Ellen, L.

Rosser, L.

Royall of Blaisdon, B.

Sawyer, L.

Scotland of Asthal, B.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Soley, L.

Stern, B.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Blackburn, L.

Taylor of Warwick, L.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turnberg, L.

Turner of Camden, B.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warwick of Undercliffe, B.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Williams of Elvel, L.

Wills, L.

Wood of Anfield, L.

Worthington, B.

Young of Hornsey, B.

Young of Old Scone, B.

NOT CONTENTS

Addington, L.

Ahmad of Wimbledon, L.

Anelay of St Johns, B. [Teller]

Armstrong of Ilminster, L.

Arran, E.

27 Feb 2013 : Column 1110

Ashdown of Norton-sub-Hamdon, L.

Astor of Hever, L.

Attlee, E.

Avebury, L.

Baker of Dorking, L.

Bates, L.

Berridge, B.

Bew, L.

Bilimoria, L.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Bowness, L.

Brabazon of Tara, L.

Bradshaw, L.

Bridgeman, V.

Brinton, B.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Burnett, L.

Buscombe, B.

Byford, B.

Caithness, E.

Cathcart, E.

Chadlington, L.

Chidgey, L.

Colwyn, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Cox, B.

Craig of Radley, L.

Craigavon, V.

Crickhowell, L.

De Mauley, L.

Deben, L.

Deighton, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dykes, L.

Eames, L.

Eaton, B.

Eccles, V.

Eccles of Moulton, B.

Eden of Winton, L.

Elton, L.

Empey, L.

Exeter, Bp.

Faulks, L.

Fellowes of West Stafford, L.

Fink, L.

Finlay of Llandaff, B.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Fraser of Carmyllie, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Goodlad, L.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Greenway, L.

Hamwee, B.

Hanham, B.

Harris of Peckham, L.

Harris of Richmond, B.

Henley, L.

Higgins, L.

Hill of Oareford, L.

Hodgson of Astley Abbotts, L.

Hooper, B.

Howard of Rising, L.

Howe, E.

Howe of Aberavon, L.

Hunt of Wirral, L.

Hussain, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

King of Bridgwater, L.

Kirkwood of Kirkhope, L.

Knight of Collingtree, B.

Kramer, B.

Laird, L.

Lawson of Blaby, L.

Lee of Trafford, L.

Lexden, L.

Lingfield, L.

Liverpool, E.

Loomba, L.

Lothian, M.

Luke, L.

Lyell, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

McNally, L.

Maddock, B.

Mancroft, L.

Mar, C.

Mar and Kellie, E.

Marks of Henley-on-Thames, L.

Marland, L.

Marlesford, L.

Mawson, L.

Mayhew of Twysden, L.

Methuen, L.

Miller of Chilthorne Domer, B.

Montrose, D.

Moore of Lower Marsh, L.

Morris of Bolton, B.

Moynihan, L.

Nash, L.

Neville-Jones, B.

Newby, L. [Teller]

Newlove, B.

Noakes, B.

Northbrook, L.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

Oppenheim-Barnes, B.

Parminter, B.

Patten, L.

Perry of Southwark, B.

Phillips of Sudbury, L.

Popat, L.

Randerson, B.

Razzall, L.

Ribeiro, L.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Rogan, L.

Roper, L.

27 Feb 2013 : Column 1111

Rowe-Beddoe, L.

Ryder of Wensum, L.

St John of Bletso, L.

Sandwich, E.

Seccombe, B.

Selborne, E.

Selsdon, L.

Shackleton of Belgravia, B.

Sharkey, L.

Sharp of Guildford, B.

Sharples, B.

Shaw of Northstead, L.

Shephard of Northwold, B.

Shipley, L.

Shutt of Greetland, L.

Skelmersdale, L.

Smith of Clifton, L.

Spicer, L.

Stedman-Scott, B.

Steel of Aikwood, L.

Stephen, L.

Stevens of Kirkwhelpington, L.

Stewartby, L.

Stowell of Beeston, B.

Strasburger, L.

Sutherland of Houndwood, L.

Taylor of Goss Moor, L.

Taylor of Holbeach, L.

Thomas of Swynnerton, L.

Thomas of Winchester, B.

Tope, L.

Trefgarne, L.

Trimble, L.

True, L.

Tugendhat, L.

Tyler, L.

Verma, B.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Warnock, B.

Warsi, B.

Wasserman, L.

Wheatcroft, B.

Wilcox, B.

Younger of Leckie, V.

6.13 pm

Schedule 1 : Planning applications made to Secretary of State: further amendments

Amendment 19

Moved by Lord Ahmad of Wimbledon

19: Schedule 1, page 38, line 37, after “71” insert “or paragraph 8(6) of Schedule 1”

Amendment 19 agreed.

Clause 4 : Permitted development rights for changes of use: prior approvals

Amendment 20 not moved.

Amendment 21

Moved by Lord Ahmad of Wimbledon

21: After Clause 4, insert the following new Clause—

“Local development orders: repeal of pre-adoption intervention powers

(1) The Town and Country Planning Act 1990 is amended as follows.

(2) Section 61B(1) to (7) (Secretary of State or Welsh Ministers may call in unadopted local development order for approval or may direct that it be modified) cease to apply in relation to England.

(3) Accordingly—

(a) in section 61B(1) (power to call in unadopted order) after “local planning authority” insert “in Wales,”, and

(b) in section 61B(6) (power to direct that unadopted order be modified) after “local development order” insert “being prepared by a local planning authority in Wales”.

(4) In section 61B, after subsection (7) insert—

“(7A) Where a local development order is adopted by a local planning authority in England, that authority must submit a copy of the order to the appropriate authority as soon after the order’s adoption as is reasonably practicable.”

(5) In paragraph 1 of Schedule 4A (power to specify procedure for preparing local development orders) after sub-paragraph (2) insert—

27 Feb 2013 : Column 1112

“(2A) Sub-paragraph (2)(a) applies in relation to England as if for “submission, approval, adoption,” there were substituted “adoption, post-adoption submission,”.”

(6) In Schedule 4A omit—

(a) paragraph 4 (information about local development orders to be included in English planning authorities’ monitoring reports under section 35 of the Planning and Compulsory Purchase Act 2004), and

(b) in paragraph 1(3), the words “35 or”.”

Lord Ahmad of Wimbledon: My Lords, during the debate in Committee on permitted development rights, a subject to which we shall return on day two on Report, concerns were expressed about the operation of local development orders. In response to those concerns we have brought forward changes to the Town and Country Planning Act 1990 by proposing the introduction of a new clause to the Bill in respect of the operation of the powers in England. These are matters which are devolved in respect of Wales.

The new clause removes current powers for the Secretary of State to intervene in and approve local development orders and for local planning authorities to report on them in England. This will mean local authorities will be able to consult on and make a local development order without the need to send a copy to the Secretary of State for his consideration and approval. Similarly, an authority will not have to report on the effectiveness of the order. Instead the local authority will just have to send a copy of the order to the Secretary of State once adopted.

6.15 pm

As we have made clear during previous debates on the planning clauses in the Bill, we are keen to free the planning system from unnecessary constraints to ensure that local planning authorities can focus on the most important planning matters in their area. We welcome that local authorities are also taking strides in this area and want to ensure that they can use local development orders to their maximum benefit to remove barriers. Local development orders provide a quick and simple way to extend permitted development rights locally. The number being put in place across the country is booming. More than 30 local development orders have now been put in place in enterprise zones with more coming through by the month. These orders are contributing to growth by helping to speed up the delivery of everything from small domestic alterations to major industrial development. Having this central knowledge about the local development orders that have been adopted helps to spread good practice and promote their potential.

As we indicated in Committee, we welcomed the interest of my noble friends Lord Tope and Lord Shipley in making the case for greater freedoms for local planning authorities. We are clear that experience and interest in making local development orders is growing rapidly and we want to capture this. I believe that the proposed new clause will both encourage and give confidence to local authorities to be ambitious and bring forward greater planning simplification in their areas. I therefore hope that the House will support its inclusion in the Bill. I beg to move.

27 Feb 2013 : Column 1113

Lord McKenzie of Luton: My Lords, we are content with the amendment.

Amendment 21 agreed.


Clause 6 : Modification or discharge of affordable housing requirements

Amendment 22

Moved by Lord McKenzie of Luton

22: Clause 6, page 6, line 5, at end insert—

“(1A) This section only applies in relation to English planning obligations agreed prior to Royal Assent.”

Lord McKenzie of Luton: My Lords, the intent of the amendment would be to restrict the application of the provisions relating to modification or discharge of affordable housing requirements to those that were agreed prior to Royal Assent. That amendment was tabled by the noble Lord, Lord Best, in Committee, and I am delighted that he has added his name to it today. I should make it clear that this is not an attempt to usurp his role in this; nobody knows the issues better than the noble Lord, but I was not sure whether he would bring it back.

If these provisions concerning renegotiation of Section 106 agreements are not to be removed from the Bill, they must be constrained. We will come on to sunset clauses shortly, but we should note that the Government’s proposition is only one small step from where the Bill now stands. In Committee, we acknowledged the significant contribution that Section 106 agreements have made to this country’s need for affordable housing. We have noted that local authorities have existing powers to renegotiate Section 106 agreements and that many are using these. We remain sceptical about the need for these new powers. However, notwithstanding these concerns, on the basis of the Government’s own logic, there is no need for the rights in the Bill to carry on for ever. If the rationale for Clause 6 is that developers entered into Section 106 affordable housing obligations when economic times were better, is it the Government’s position that things will continue to get worse?

If the clause is to be brought to an end in three years, unless the Government are expecting a further downturn in this period, it should not stand in its current form. When we debated this in Committee, the Government argued that there was continuing uncertainty in the market. That may be the case, but presumably the Minister is not arguing for a risk-free platform for developers. Clause 6 was, we understand, supposed to address the substantial change in market circumstances fuelled by the global financial crisis of 2008. Applicants should not agree to Section 106 agreements that they consider will render their development unviable. The use of viability appraisals in negotiations is becoming increasingly common.

We have added our names to Amendment 28 which, as we have heard, would introduce a sunset clause bringing to an end the provisions relating to the modification of affordable housing obligations after three years. Given that very new affordable housing requirements are unlikely to be able to make successful applications, this would generally mean a practical cut-off point of

27 Feb 2013 : Column 1114

obligations entered into by about 2014. So far as the Government’s version of a sunset clause is concerned, this does not move us much further than the Bill, which already gives the power to the Secretary of State by order to repeal Sections 106BA and 106BB of the Town and Country Planning Act 1990. The Government’s version of a sunset clause, while repealing those sections at the end of April 2016, also gives the power to the Secretary of State by order to substitute a later date. In effect, there is no clear end date to these provisions. Therefore, we will look to the Government to explain in detail, when they speak to these provisions, why the firm date of April 2016 is not sufficient. If we are not satisfied, we reserve the right to return to this matter at Third Reading. I beg to move.

Lord Best: My Lords, I have added my name to Amendment 22, which was prepared by the Local Government Association. I am grateful to the noble Lord, Lord McKenzie, for introducing this amendment and explaining its purpose and value. My overarching concern is that the intention of Clause 6, which is to see stalled development up and running swiftly, will not materialise without substantial changes to this clause. Indeed, the knowledge that central government may overrule legal agreements between local government and house builders may encourage exactly the wrong response from some elements in the housebuilding industry, and this measure could backfire.

The Clause 6 procedure offers relief for house builders where they have paid too much for a site and now wish to be excused from their obligations to provide affordable housing. Amendment 22 would mean that only agreements already made could be addressed by going down this Clause 6 route. The practice of developers speculatively outbidding others—including housing associations keen to buy a site and fulfil the affordable housing obligations on it—would not be perpetuated into the future. It would no longer be possible for developers to say, “Let us gamble on house prices rising, but if they do not do so, we can go to the Planning Inspectorate and secure a release from our Section 106 agreement”.

In my most charitable moments, I can feel some sympathy for the small builder who is unable to work on a swings-and-roundabouts basis of some highly profitable and some less profitable site purchases and who unwisely paid too much for a site at the height of the boom some four years ago. The bigger house builders are currently doing very well. Persimmon and Bovis have just reported huge increases in profits of more than 50% and more than 60% respectively. Some smaller developers, however, may have been caught out in 2008 or 2009, thinking house prices would rise inexorably when they have been pretty flat outside London and the hot spots. Nevertheless, surely we do not want to encourage continuing speculation on the basis that, from now on, the state will bail out those who bite off more than they can chew. Any developer entering into a Section 106 negotiation at the current time is clearly doing so with their eyes open to the economic realities of the day. These negotiations make use of viability appraisals and the signal must go out to house builders that they can no longer sign agreements in the expectation that they will not really be necessary

27 Feb 2013 : Column 1115

to honour those agreements because central government’s planning inspectors will set aside their obligations if the developers can show that they will not make a profit of 20% or so.

This amendment draws a line under state intervention in these Section 106 agreements from the date that the Bill becomes an Act. I strongly support it. Alternative amendments for a sunset clause three years hence seem to miss the point. It is now that we want people to get busy and get started on sites that they own and are currently stalled. Every time a local agreement to produce more affordable housing is set aside, households on low incomes waiting for a home are forced to wait longer. We should ensure that this happens on only the rarest occasions. I strongly support an amendment that would stop the perpetuation of the opportunity for developers to renege on agreements that they have signed with local authorities from henceforth.

Lord Shipley: My Lords, I will speak to Amendment 28. I strongly support Amendment 22 and the principle behind it that only planning obligations agreed prior to Royal Assent should be included in the Bill. Amendment 28 is a sunset clause, and the Government have, through their own Amendment 32, accepted the principles of this. Our view is that no applications should be made under this section three years after its coming into effect. I accept that there may be a case to give power to renew or extend a subsection if economic circumstances demand it. However, I am not convinced that it should be open-ended and effectively give a power to the Secretary of State to extend it for as long as he would wish it to be extended. I am seeking from the Minister some clarification as to what the Government’s intention actually is with their Amendment 32.

I will be very precise about the questions to which I think the House should seek to secure answers. It would be helpful if the Minister could refine her amendment at Third Reading, so that any extension to the time limit should be for no more than two years from the date it is proposed. That would have to be before April 2016, so it would give an absolute time limit of five years. Secondly, would the Minister commit to presenting a report to both Houses before bringing forward regulations to extend that time limit? Would the Minister also commit to consulting with social housing providers and others prior to presenting that report, in order to inform its contents? Thirdly, will the Minister also commit to accepting the will of both Houses in any vote to extend the time limit?

The Government should still look to extend Clause 6 to include the full range of planning obligations. Not only would this challenge any perception that the Government viewed affordable housing as of secondary importance in planning terms; but if other obligations are causing the delay, that could remove significant impediments to that development. We will have a chance in a further amendment to look at that a little more closely, but I remain concerned that the Government’s amendment is too open-ended.

6.30 pm

Baroness Hanham: My Lords, I should like to explain the purpose and operation of the sun-setting amendment, Amendment 32, in my name in this group. After careful consideration of the concerns expressed by noble Lords

27 Feb 2013 : Column 1116

in Committee, the amendment we propose sunsets Clause 6 on 30 April 2016 unless an affirmative order is made for it to continue.

Until I heard them speak, I thought that this addressed the amendment proposed by the noble Lords, Lord Shipley, Lord McKenzie and Lord Tope, and the recommendations of the Delegated Powers and Regulatory Reform Committee. As I made clear in Committee, the clause is targeted at helping development to get under way on sites that are being stalled because of the current economic conditions. We believe it is essential to allow for a review of schemes where this could bring development back into viability. This would deliver more private and affordable homes than would otherwise come forward.

The clause already contains a power for the Secretary of State to switch it off by order, reflecting our underlying thinking that this is about addressing current uncertainties. However, we have listened carefully to the arguments that we should define this more precisely. Arguments have been made that the clause should reflect the current uncertainty in the property market and that we should insert a date when the operation of the clause will cease. We have therefore set the sunset date for 30 April 2016. That is based on the forecast from the Office for Budget Responsibility that shows that investment in housing is expected to stabilise in 2016. I accept what the noble Lord, Lord Best, said; there is evidence that some of that housing is beginning to move, which is very welcome. This is reinforced by evidence from the Centre for Economics and Business Research, which expects house prices to return to pre-recession levels in 2016.

The amendment will send a clear message to local authorities and house builders to review their schemes where affordable housing viability is an issue. None of us can be certain about the future of the property market—forecasts are not guarantees—and therefore we have taken a sensible and pragmatic power to extend this date by order should that prove necessary.

The amendments to Clause 28 will require the order to be made through the affirmative procedure and both Houses will have an opportunity to vote. So there is a commitment for it to come back to this House if necessary. Although the amendment does not limit the time period for any future extension, I fully anticipate that this would be for a limited time justified by prevailing market conditions. In taking this approach, we have again followed the suggestion of the Delegated Powers and Regulatory Reform Committee when it commented on the Bill ahead of Committee. The amendment also includes a separate power to make transitional or transitory provisions related to the sunset of the clause by order.

Turning to the amendment tabled by the noble Lords, Lord McKenzie and Lord Best, this would allow only affordable housing obligations in place at the time of Royal Assent to be challenged on the grounds of viability. As I said in Committee, we are still not in a position of stability in the market and, therefore, applying such a limited amendment would not be helpful.

I also provided evidence in Committee from the Office for Budget Responsibility which indicated varied performance across the country. House price growth

27 Feb 2013 : Column 1117

remains subdued across much of the United Kingdom, and it is widely varied. The recently announced 2.5% house price increase in England was driven by a 5% rise in London and a 3% increase in the south-east. However, in other parts of the country there is a wide variation in house price growth. I said earlier that the forecast of the Office for Budget Responsibility shows house price growth stabilising at 4% by 2016-17.

Concerns have been expressed that a developer could agree a Section 106 next year knowing that he could apply to renegotiate it. If the local planning authority has taken account of local economic realities and negotiates a fair and viable agreement, it is likely that there will be no case for reopening the agreement within the short-to-medium term and a developer would not have viability evidence with which to be successful on appeal. The amendments do not make allowance for current market uncertainties. We believe that we need three years for the housing construction market to stabilise. We wish to allow opportunities for scheme viability to be reviewed, even for those which may come forward after the Bill is given Royal Assent.

Amendments 51 and 52 are minor government amendments which make changes to Schedule 2. They seek to change the numbering of an existing amendment to Schedule 6 of the Town and Country Planning Act 1990. With that explanation for those amendments, and given what I have said about the reasons for the Government’s time-limit on the sunset clause, I hope the noble Lord will withdraw his amendment.

Lord McKenzie of Luton: My Lords, I thank the Minister for her response. I also thank the noble Lord, Lord Best, for his support and for properly and effectively explaining Amendment 22, and the noble Lord, Lord Shipley, for his tacit support.

The Government’s response to this is that unless you have certainty in the housing market you must always have the provision currently contained in the Bill. One might accept that argument where there has been particular turmoil in the financial markets—as was occasioned in 2008 when obligations were entered into and the market changed dramatically—but why should there now be this ongoing facility for people who can make a judgment as to what is happening in the market? Yes, there will be some uncertainty—there are always uncertainties in markets—but there is no substantial reason to prolong this opportunity. A cut-off of those things which will have happened by the time this Bill comes into effect is entirely reasonable. In fact, it could be argued that the cut-off should be earlier than that. Indeed, the changes that the Government are making to the regulations generally about affordable obligations go back only to April 2010, so that might be even more restrictive than the amendment allows for.

As to the sunset clause, it cannot be much of a sunset clause if it can be renewed endlessly. There is no certainty as to when its provisions will be brought to an end. I am inclined to support the view of the noble Lord, Lord Shipley, that we will look to the Minister to come back with something more definitive on Third Reading. If the Minister is not able to do so, we will

27 Feb 2013 : Column 1118

look to amend it because this is, quite rightly, open business. We are dealing with new business tonight which has a continuing uncertainty.

As to Amendment 22, we have not heard a convincing reason why we should not press the amendment, and I seek the view of the House.

6.38 pm

Division on Amendment 22

Contents 147; Not-Contents 184.

Amendment 22 disagreed.

Division No.  2

CONTENTS

Adams of Craigielea, B.

Adonis, L.

Afshar, B.

Alli, L.

Alton of Liverpool, L.

Anderson of Swansea, L.

Armstrong of Hill Top, B.

Bach, L.

Bakewell, B.

Bassam of Brighton, L. [Teller]

Beecham, L.

Best, L.

Bhatia, L.

Bilimoria, L.

Bilston, L.

Borrie, L.

Bradley, L.

Brooke of Alverthorpe, L.

Brookman, L.

Brooks of Tremorfa, L.

Browne of Belmont, L.

Browne of Ladyton, L.

Campbell-Savours, L.

Carter of Coles, L.

Clancarty, E.

Clarke of Hampstead, L.

Clinton-Davis, L.

Corston, B.

Crawley, B.

Davies of Coity, L.

Davies of Stamford, L.

Dean of Thornton-le-Fylde, B.

Donaghy, B.

Donoughue, L.

Dubs, L.

Elder, L.

Elystan-Morgan, L.

Evans of Parkside, L.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Finlay of Llandaff, B.

Foulkes of Cumnock, L.

Gale, B.

Golding, B.

Gordon of Strathblane, L.

Goudie, B.

Gould of Potternewton, B.

Grenfell, L.

Grocott, L.

Hanworth, V.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haworth, L.

Hayman, B.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollis of Heigham, B.

Howarth of Newport, L.

Howie of Troon, L.

Hoyle, L.

Hughes of Woodside, L.

Hunt of Kings Heath, L.

Irvine of Lairg, L.

Janner of Braunstone, L.

Jones, L.

Judd, L.

Kennedy of Southwark, L.

Kennedy of The Shaws, B.

Kilclooney, L.

Kinnock, L.

Kinnock of Holyhead, B.

Kirkhill, L.

Knight of Weymouth, L.

Layard, L.

Lea of Crondall, L.

Liddell of Coatdyke, B.

Liddle, L.

Lister of Burtersett, B.

McAvoy, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

Mackenzie of Framwellgate, L.

McKenzie of Luton, L.

Mallalieu, B.

Martin of Springburn, L.

Masham of Ilton, B.

Massey of Darwen, B.

Mawson, L.

Maxton, L.

Mitchell, L.

Monks, L.

Morgan of Ely, B.

Morris of Aberavon, L.

Morris of Handsworth, L.

Morrow, L.

Nye, B.

O'Neill of Clackmannan, L.

Pitkeathley, B.

Ponsonby of Shulbrede, L.

Prescott, L.

Radice, L.

Ramsay of Cartvale, B.

Rea, L.

Reid of Cardowan, L.

Rendell of Babergh, B.

Richard, L.

Rooker, L.

Rosser, L.

Royall of Blaisdon, B.

Sandwich, E.

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Scotland of Asthal, B.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Soley, L.

Stevens of Kirkwhelpington, L.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Blackburn, L.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turner of Camden, B.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warwick of Undercliffe, B.

Watson of Invergowrie, L.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Wills, L.

Wood of Anfield, L.

Worthington, B.

Young of Old Scone, B.

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Addington, L.

Ahmad of Wimbledon, L.

Anelay of St Johns, B. [Teller]

Armstrong of Ilminster, L.

Arran, E.

Ashdown of Norton-sub-Hamdon, L.

Astor of Hever, L.

Attlee, E.

Avebury, L.

Bates, L.

Berridge, B.

Blencathra, L.

Bowness, L.

Brabazon of Tara, L.

Bridgeman, V.

Brinton, B.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Burnett, L.

Buscombe, B.

Byford, B.

Caithness, E.

Cathcart, E.

Chadlington, L.

Chidgey, L.

Colwyn, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Craigavon, V.

Crickhowell, L.

De Mauley, L.

Deben, L.

Deighton, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dykes, L.

Eaton, B.

Eccles, V.

Eccles of Moulton, B.

Eden of Winton, L.

Elton, L.

Empey, L.

Falkner of Margravine, B.

Faulks, L.

Fellowes of West Stafford, L.

Fink, L.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Fraser of Carmyllie, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Goodlad, L.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Greenway, L.

Hamwee, B.

Hanham, B.

Harris of Peckham, L.

Harris of Richmond, B.

Henley, L.

Higgins, L.

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Hodgson of Astley Abbotts, L.

Howard of Rising, L.

Howe, E.

Howe of Aberavon, L.

Hunt of Wirral, L.

Hussain, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

King of Bridgwater, L.

Kirkwood of Kirkhope, L.

Knight of Collingtree, B.

Kramer, B.

Lawson of Blaby, L.

Lee of Trafford, L.

Lexden, L.

Lingfield, L.

Liverpool, E.

Loomba, L.

Lothian, M.

Luke, L.

Lyell, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

McNally, L.

Maddock, B.

Maginnis of Drumglass, L.

Mancroft, L.

Mar and Kellie, E.

Marks of Henley-on-Thames, L.

Marland, L.

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Miller of Chilthorne Domer, B.

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Morris of Bolton, B.

Moynihan, L.

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Newby, L. [Teller]

Newlove, B.

Noakes, B.

Northbrook, L.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

Oppenheim-Barnes, B.

Parminter, B.

Patel, L.

Patten, L.

Perry of Southwark, B.

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Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Roper, L.

Ryder of Wensum, L.

St John of Bletso, L.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Shackleton of Belgravia, B.

Sharkey, L.

Sharp of Guildford, B.

Sharples, B.

Shaw of Northstead, L.

Sheikh, L.

Shephard of Northwold, B.

Shutt of Greetland, L.

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Thomas of Winchester, B.

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Walmsley, B.

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Younger of Leckie, V.

6.50 pm

Amendment 23

Moved by Lord Shipley

23: Clause 6, page 6, line 15, at end insert—

“(2A) An authority can only make a determination in accordance with subsection (3)(a) if it is satisfied, having regard to the development plan, that modifications to planning obligations other than the affordable housing requirements affecting the development or a reduction in the level of the community infrastructure levy payable would not be more appropriate.”

Lord Shipley: My Lords, I declare my vice-presidency of the Local Government Association.

This amendment is designed to assess why only the affordable housing element of a stalled development should be considered. To make a stalled development economically viable, it is important to look at the full range of planning obligations, not just affordable housing. Sometimes it might be sensible to vary affordable housing obligations, but at other times other matters, such as the scale of highway contributions or a developer’s community infrastructure levy liability, might have a greater impact on a development’s viability. This approach would reflect the Government’s desire to ensure that planning applications are not acting as a barrier to new development and would give much greater flexibility to planning authorities in their negotiations with developers.

I have read carefully the draft viability guidance on Section 106 affordable housing requirements. It says that the application and appeal process will assess the viability of affordable housing requirements only. It

27 Feb 2013 : Column 1121

will not reopen any other planning policy considerations or review the merits of the permitted scheme. I believe it is very clear that only affordable housing requirements could be subject to negotiation.

However, it also says at a later point in the draft that the timing and level of off-site contributions may also be considered. Will the Minister define an off-site contribution? I take it to be something broader than simply the affordable housing requirement and might actually include the community infrastructure levy. I would like clarification of that because later in the draft viability guidance it says that the relevant sections, Sections 106BA and 106BB, do not provide an opportunity to reopen policy considerations or requirements for planning obligations other than for affordable housing. Again, the matter is clear. Therefore I am left wondering what an off-site contribution actually is, as presumably the affordable housing is on site.

It seems to me to be common sense that local planning authorities should be given the capability to consider other planning obligations as part of a Section 106 agreement beyond simply the affordable housing component. It could be that if there were a successful negotiation on those other matters, it would enable more affordable housing to be built as a consequence. For the reassurance of the Minister, I had not planned to move this to a vote, but I believe that the issue ought to be explored so that we have clarification of what is actually intended and why the Government feel that they cannot permit other planning obligations to be part of the consideration of the renegotiation of a Section 106 agreement. I beg to move.


Lord Jenkin of Roding: My noble friend Lord Shipley has raised an interesting issue, which has been raised at earlier stages, as to why only affordable housing is able to be renegotiated. He has also added to his amendment the question of the community infrastructure levy. Bearing in the mind the main purpose of the CIL, I would question whether that would be an appropriate reduction to seek. The CIL is after all intended to provide local authorities with the resources to pay for some of the infrastructure that would be necessary to support the housing requirements. It is true that affordable housing does not attract the CIL, but the rest of the housing development would. If one is going to have a community infrastructure levy, I would be very reluctant to see that negotiated down on the grounds of the developer saying that their scheme is not viable.

We have not had a full explanation of why only affordable housing is able to be renegotiated, because there may well be other obligations. I, too, read the sentence in the guidance about the other “off-site” obligations and I was not quite sure what that meant. When I first read it, I thought that it meant off-site affordable housing, but affordable housing is often not immediately on the same site as the rest of the development; it can be on a different site, so I do not think that that is what it means. I would welcome an explanation from my noble friend on the Front Bench as to what is involved. Hitherto, I have wholly supported the idea of renegotiation. Indeed, it has been the main burden of complaint of developers that they have agreed in different circumstances to affordable housing obligations

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and that it is that which makes their development unviable. That is why there has been, as was referred to earlier, a lot of negotiation going on with local authorities anyway. However, I am not aware of any local authorities which have negotiated reductions in other planning requirements that may have been necessary.

The draft affordable housing requirements guidance states:

“Timing and level of off-site contributions may also be considered”.

What does that refer to? I think that I took the guidance off my computer this morning, so it has come just in time. I would be very much against seeking to renegotiate downwards the community infrastructure levy.

Lord McKenzie of Luton: My Lords, we received the draft viability guidance late last night, which was not particularly helpful for discussions that we were going to have this evening. I just put it on record that if, when we have had chance to study the guidance, we found particular issues relating to the Bill, we would reserve the right to pick them up at Third Reading. That should not be precluded given the lateness of the availability of that quite important information.

The noble Lord, Lord Shipley, has raised an important question as to why affordable housing should take all the strain to deal with viability. The amendment does not seem necessarily to preclude an appeal to the Secretary of State and what the Secretary of State would do in those circumstances, but that is a drafting point perhaps for another occasion.

Perhaps the Minister might cover in her response the relationship between the Bill and the updated regulations, which I think come into effect tomorrow and deal generally with the right to renegotiate Section 106 obligations, affordable housing and the rest. That would now be done within a three-year period, which I think is the thrust of those regulations. It would be helpful if that could be put in context.

I have been concerned throughout consideration of this Bill that affordable housing is asked to take the strain if a site is not viable. There are broader considerations which should come into play.

7 pm

Baroness Hanham: My Lords, I think that it is explanations that are asked for rather than anything else. I was asked what “off-site” provision was. It is exactly what it says. As noble Lords will know, when an obligation is entered into for affordable housing, in many cases that affordable housing is not on the main development site but is being provided elsewhere. All the guidance says is that any affordable housing that is not on the particular site can be taken into account. I hope that explains that. We discussed this quite a bit in Committee but it should be quite clear that this clause relates only to affordable housing. That is the only element that we are seeking to address within this Bill.

Local authorities can voluntarily renegotiate Section 106 agreements already. Under the regulations that have just been laid, they can be required to look at the whole aspect. Often the affordable housing is quite a large aspect of the development obligations and it therefore makes sense not to go through the whole galaxy of the Section 106 review, but to take account of the affordable housing and go through a quicker process.

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This is, of course, taken into account against the background of the development plan and has to be reviewed under those provisions together with what was taken into account when planning consent was granted in the first place. The development plans include policies for the delivery of affordable housing to meet local needs. These policies are usually applied in the context of individual site viability. The effect of the clause is to help to deliver these policies by bringing forward viable development; it does not require a revisiting of the plan policies.

The noble Lord, Lord McKenzie, made, I think, a moderate complaint about the fact that the proposals for establishing viability appeared only last night. I recognise that and I apologise that they were rather late. However, they are not very detailed and I think anyone with a lunchtime would have had an opportunity to read them. However, lunchtime does not exist in my life and maybe not in other noble Lords’ lives either, so I understand the noble Lord’s point.

The obligations that we are discussing were probably agreed at the time of the property boom and before the statutory tests for Section 106 were introduced in April 2010. Before then there was no statutory requirement to ensure that obligations were,

“necessary to make the development acceptable in planning terms”.

Therefore, there may be capacity to revisit a range of obligations that were required before the tests were in place.

A full review of all aspects of an agreement could be costly and time-consuming for both parties. We wanted a streamlined review process as a backstop whereby viability is an issue. Affordable housing obligations are often the most expensive element of the Section 106 agreement and are agreed subject to viability. Research from 2007-08 found that about 50% of all planning obligations were for affordable housing so this is quite a significant area. That is why we have focused on only the affordable housing element of a Section 106 agreement in the Bill. For obligations agreed since April 2010, the statutory tests should ensure that the local authority can require only those items that are,

“necessary to make the development acceptable in planning terms”.

Our approach will safeguard essential mitigation measures, such as transport, open space and education provision, which are required for the scheme to go ahead, and would be part of the overall Section 106 agreement but would probably take a great deal longer to negotiate. To open up the clause to these other obligations would add complexity to the review and could make the development unacceptable in planning terms.

I turn now to community infrastructure levy payments, which I am not sure the noble Lord, Lord Shipley, mentioned but my noble friend Lord Jenkin did. It is not very helpful to bring them into consideration here. The community infrastructure levy is non-negotiable so it cannot be taken into account as it cannot be renegotiated. The levy is up front—developers know what they will have to pay and it is predictable. It is set at the local level in accordance with local viability. Local authorities do not have discretion to waive or reduce the community infrastructure levy once the payments are set. The regulations make provision for exceptional circumstance relief but only subject to very strict criteria.

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With those explanations and going back to the indication that this clause relates only to affordable housing in this Bill, that Section 106 agreements can be renegotiated voluntarily and that the regulations for post-2010 are now in place, I hope noble Lords will realise that there is a package here and will not press their amendments.

Lord Shipley: My Lords, I thank the Minister for her reply and for her explanation. I am sure that we share the aim of wanting to build more affordable housing. In accepting the Minister’s assurances about the Government’s desire to get housebuilding on-site, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Amendment 24

Moved by Lord Ahmad of Wimbledon

24: Clause 6, page 7, line 10, after “to” insert “—

(a) ”

Lord Ahmad of Wimbledon: My Lords, these amendments set out procedural steps to reflect the existing mayoral planning powers on applications of strategic importance in London. They are therefore in line with the amendment tabled by my noble friend Lord Tope and supported by my noble friend Lord Jenkin and the noble Baroness, Lady Valentine, in Committee.

We are proposing that the mayor should be notified of applications under Section 106BA relating to planning consents on which he was formally consulted, and that he should have the right to submit evidence on the viability of to those applications if he wishes. To ensure that decisions are made in a timely manner, we have set tight timescales for the Mayor of London to notify and submit representations to the authority. The mayor will have seven days from the day the application was received by the authority to notify it of whether he wants to make representations. The mayor will then have 14 days from the day the application was received by the authority to submit representations, or such other time as agreed between the authority and the applicant. The local planning authority will have an additional seven days to determine any application to which this amendment applies. That is to reflect the additional time needed to work with the Greater London Authority. I hope noble Lords will welcome the amendments we are proposing and I beg to move.

Lord Tope: I very much welcome these amendments. I thank the Minister for listening, hearing and acting.

Amendment 24 agreed.

Amendment 25

Moved by Lord McKenzie of Luton

25: Clause 6, page 7, line 10, leave out “guidance issued by the Secretary of State.” and insert “regulations, subject to consultation, setting out the criteria upon which viability, for the purposes of this section, is to be assessed.

(8A) Regulations under subsection (8) shall be in the form of a statutory instrument and shall not be made unless a draft of them has been laid before and approved by both Houses of Parliament.”

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Lord McKenzie of Luton: My Lords, I turn again to the tardiness of the criteria. The noble Baroness may have been able to look at them over lunch; I was dealing with the consultation responses, which arrived on my desk this morning. Having said that, we need to study the guidance and reserve our right to deal with any residual issues on Report. I was not going to move this amendment, but I did not want to leave hanging the two important amendments tabled by the noble Lord, Lord Best. The purpose of Amendment 25 is to say that it should not just be left to guidance; there should be a process and a statutory instrument that deals with viability issues, given its importance. I will be happy to reserve judgment on that once I have had the opportunity to study in detail what was issued to us late last night. On that basis, I beg to move.

Lord Best: Have we reached my amendments? No? I did not think that I had missed my cue.

Baroness Hanham: My Lords, I apologise. I always manage to do this once, sometimes more than once. Perhaps we can rest a moment before we hear from the noble Lord, Lord Best.

Amendment 25, in the name of the noble Lord, Lord McKenzie, which I have noted but which I shall say more about, requires local authorities to have regard to regulations setting out how viability will be assessed. Those regulations are to be subject to consultation and the affirmative procedure. I hear what the noble Lord says about returning to this at Third Reading, but in the mean time it might be helpful if I just go through where we are.

The draft viability guidance has been circulated to assist the House’s understanding of how developers, local authorities and the Planning Inspectorate will approach the new process. It is an early draft, and we intend to discuss it further with professional bodies and interested groups before a final version is issued on Royal Assent.

Noble Lords will see that the basic principle of the guidance is that it works with existing industry practice on assessment of viability. It strongly encourages developers to use the same methodology and basic assumptions as in their original assessment and to focus on what has changed. A number of technical questions have been raised on the draft viability guidance. If it would be helpful to noble Lords, I am happy to have a meeting between now and Third Reading to hear views and see whether we can resolve, or at least discuss, some of the issues.

There is a good deal of technical information in the draft guidance, which needs to be kept under review. Using secondary legislation would not allow the flexibility to adapt to changing circumstances and data that statutory guidance offers.

Noble Lords will recall that the legislation for the community infrastructure levy, introduced under the previous Government, makes provision for statutory guidance. That covers the assessment of viability for the purposes of setting the levy. It is a model that allows for the required flexibility and is one that we intend to follow.

I hope that, with that reassurance, the noble Lord will withdraw his amendment, even if only for the moment.

27 Feb 2013 : Column 1126

Lord McKenzie of Luton: I am grateful to the Minister for that reply. I certainly propose to withdraw the amendment. I am grateful for the offer of a meeting between now and Third Reading to have at least some chance to discuss the draft guidance. I hang on to the point that, as the noble Baroness said, this is an early draft that gives us no further formal opportunity for input. The criteria will be central to the operation of the provisions. Perhaps that is a matter for Third Reading, but I would be very interested in taking up the offer of a session before then on what detail is available. I beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendments 26 and 27

Moved by Baroness Hanham

26: Clause 6, page 7, line 10, at end insert “, and

(b) where the determination relates to an application to which section 106BAA applies, any representations made by the Mayor of London in accordance with that section.”

27: Clause 6, page 7, line 14, after “(a)” insert “(and subject to section 106BAA(5))”

Amendments 26 and 27 agreed.

Amendment 28 not moved.

Amendment 29

Moved by Baroness Hanham

29: Clause 6, page 8, line 5, at end insert—

“106BAA Duty to notify the Mayor of London of certain applications under section 106BA

(1) This section applies to an application under section 106BA(2) in relation to a planning obligation where—

(a) the application for the planning permission to which the planning obligation relates was an application to which section 2A applied (applications of potential strategic importance relating to land in Greater London),

(b) the application for planning permission was not determined by the Mayor of London, and

(c) pursuant to an order under section 2A or a development order, the local planning authority that determined the application for planning permission was required to consult the Mayor of London in relation to that determination.

(2) A local planning authority that receives an application to which this section applies must send a copy of the application to the Mayor of London before the end of the next working day following the day on which the application was received.

In this subsection, “working day” means a day which is not a Saturday, Sunday, Bank Holiday or other public holiday.

(3) The Mayor of London must notify the local planning authority before the end of the period of 7 days beginning with the day on which the application was received by the authority whether the Mayor intends to make representations about the application.

(4) Where pursuant to subsection (3) the Mayor of London notifies the local planning authority that the Mayor intends to make representations, those representations must be made before—

(a) the end of the period of 14 days beginning with the day on which the application was received by the authority, or

(b) the end of such longer period as may be agreed in writing between the local planning authority and the Mayor.

(5) Where this section applies, section 106BA(9)(b) applies as if it required an authority to give notice of their determination to an applicant within—

(a) the period of 35 days beginning with the day on which the application was received by the authority, or

27 Feb 2013 : Column 1127

(b) such longer period as is agreed in writing between the applicant and the authority.”

Amendment 29 agreed.

7.15 pm

Amendment 30

Moved by Lord Best

30: Clause 6, page 9, line 13, at end insert—

“( ) the modifications necessary to ensure that if the market value of the development has increased over that predicted before the first application under section 106BA in relation to the obligation, the developer will pay a contribution proportionate to the increase in value to the local planning authority, solely for the purpose of providing local affordable housing linked to the development plan for the area.”

Lord Best: My Lords, I shall speak to Amendments 30, 31 and 35. I preface my remarks by thanking the Minister for a really helpful and lengthy meeting at which a number of my earlier amendments were discussed. On the basis of that discussion, I have dropped three of my amendments, either because I have better understood where the Government were coming from or because I noticed some modest amendments along the way. I was extremely grateful for that more than helpful discussion.

Amendments 30, 31 and 35 all address the hazards in Clause 6 and are intended to ensure that the clause achieves what the Government intend: to get developers on site and building new homes as a quid pro quo for being able to increase their profits on sites where they have previously signed up to obligations to allocate some homes for affordable housing.

Amendment 30 would protect the local authority, the taxpayer and the people who need affordable housing from developers being excused from their obligations on the grounds of expected low house prices today but making substantial profits in future when house prices have risen appreciably. The amendment inserts a clawback provision for the local authority to receive payment in kind if values rise more than expected. A highly unsatisfactory outcome from the use of Clause 6 by a developer to secure a reduction in the affordable housing on its site would be for it simply to await house price increases and make a killing later. Then, the developer would see bigger gains in the years ahead, but the whole purpose of the Bill—to get sites developed today—would be thwarted.

When I brought a similar amendment from the LGA before your Lordships in Committee, the proposition was that local authorities should share a proportion of the profit from future sales if they turned out to be at higher levels than had been expected when the deal was considered by the Planning Inspectorate. The revised amendment is intended to address concerns raised by your Lordships that that route would not be appropriate. The new version would ensure that the local authority could claw back only a commuted sum—payment in kind—in the form of finance specifically to replace some or all of the affordable housing in the original planning obligation, probably to build offsite. That seems entirely reasonable and I hope that the revised amendment will be acceptable to Ministers.

27 Feb 2013 : Column 1128

Amendment 31 takes the story forward. It is intended to address the situation where, after a Clause 6 negotiation has reduced the previous requirement for affordable housing, the developer does not, as the Government hope, start swiftly on site but instead awaits the moment when the market is more favourable and prices are higher. The primary reason why sites are stalled is the reluctance of housebuilders to press forward with developments of homes for sale because the local market is sluggish and, if they build too quickly, it will be impossible to achieve the prices they desire.

Even if they are allowed to produce fewer affordable homes—homes which are usually transferred to a housing association for rent or shared ownership—the market for outright sales will remain the same, and the housebuilder may well prefer to await an upturn rather than, despite the earnest hopes of the Government, getting going with the building work which is so badly needed. Amendment 31 would compel the developer to commence construction within six months if it receives a favourable outcome from invoking the provisions of Clause 6 and secures a reduction in its legal obligation.

That is a fundamental point. Unless there is a benefit to society in the form of a rapid start on site, most people would surely ask why the state should be intervening retrospectively to overrule a legal agreement between a local council and a housebuilder simply to increase the profits of the latter. Why should central Government step in when a speculative land purchase now means that a development is not as profitable as the housebuilder had hoped? After all, no one has suggested that local authorities should pursue housebuilders for an increase in the quota of affordable housing when, a year or two after an agreement was signed, house prices rise dramatically, as they did a few years ago, when unexpectedly high profits were made.

If the developer is able to negotiate a reduction in their Section 106 obligations, they will raise the value of the site without laying a single brick. Amendment 31 is intended to overcome this major defect in Clause 6 and require housebuilders to commence construction within six months if they receive a favourable outcome from their appeal. If the Planning Inspectorate has found the development would not have been profitable because of the level of affordable housing required and has reduced that level accordingly, there should be no good reason why the developer should continue to sit on their planning approval. Instead of being accused of land banking, they should then start delivering the homes the UK so badly needs.

Finally, Amendment 35 puts the finishing touches to these proposed changes to Clause 6 by raising the threshold of what defines commencement of development on site. Planning permissions do not last indefinitely, and in considering whether to extend a permission or allow it to expire, a local authority considers whether the developer has commenced development, defined as a “material operation” in Section 56 of the Town and Country Planning Act 1990. The Act sets out what a developer has to do on site to implement a planning permission. The physical works that make up a “material operation” can be relatively minimal when compared with the totality of the development— for example, digging a trench or starting to lay a road.

27 Feb 2013 : Column 1129

Case law is clear that it does not matter if the developer carries out those works simply to keep the planning permission alive, rather than with a genuine intention to complete the development. If developers have to start within six months, but simply dig a ditch, Amendment 31 has not taken us forward.

I moved an amendment in Committee to enable local authorities and developers to agree at the outset what the definition of commencement would be. The Minister’s response, which I fully understand, was that this would create a postcode lottery, with every council doing things differently. The problem might be countered with non-statutory guidance on best practice. However, in recognition of ministerial concerns, I am now suggesting an amendment that raises the threshold of what is defined as commencement. This amendment would alter the current definition of what constitutes a “material operation”. It would require a certain percentage of, for example, the foundations to be completed to count as a material operation and thus keep the planning permission alive. Spelling this out would have the benefit of certainty. It would encourage developers to move from commencement to completion faster in the future because a greater proportion of costs would have been incurred at an earlier stage.

In combination, these three amendments salvage something sensible from Clause 6 and save the Government from falling into a trap. The worst possible outcome would see the clause to reduce the amount of affordable homes that developers are required to build proceeding, but developers still not getting on with the job and instead banking the increased value gained from having their obligations reduced and waiting until house prices, pressurised by escalating shortages, rise and bigger profits can be made. I beg to move.

Lord Deben: Before the noble Lord sits down, may I ask a question because there is something I do not understand? What is there under present law to stop a local authority saying to a developer, “Yes, we’ll agree to this, but there are other conditions that are part of that deal”? All that the noble Lord suggests could be perfectly properly achieved in a deal with the local authority. What sort of local authority would give its permission without such a deal taking place?

Lord Best: These cases are historic, dating back to 2008-09, where a Section 106 agreement has been signed that does not specify that commencement on site must happen within six months or what commencement on site means, other than within the law. The agreement has not been, if you like, sharply enough defined, although it has followed standard practice. The opportunity then exists for the developer to say, “I don’t wish to proceed on this basis. I shall use Clause 6 and the Planning Inspectorate to reduce my obligations. Even though I signed up to that, I don’t want to be held to it any longer because I have decided that the profitability of my scheme would be increased if I waited some time and did the development later”. These amendments put pressure on the housebuilder and enable the job to be started.

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Lord Shipley: My Lords, I support the amendment so ably moved by the noble Lord, Lord Best, and would like to speak in particular to Amendment 31, to which my name has been added.

I regard this as a public interest matter and I am not currently assured that this is being addressed adequately in the Bill. It seems to me that taxpayers have a right to secure clawback if, following a renegotiation, there is a rise in the value of the land. That clawback should be spent on affordable housing because it was the inability to build and the requirements around the level of affordable housing that caused the renegotiations to take place initially. There is a public interest issue here on behalf of the taxpayer, who should be able to share in the rise of the value of land.

On Amendment 31, it is reasonable that an applicant, having renegotiated successfully, must commence development within six months of the final appeal decision. Otherwise, if they do not get on with it, what is the point of that appeal having been made? It seems to me that the public interest requires a developer to get on with the building, having successfully renegotiated the arrangement.

I read very carefully the draft liability test and I am very concerned about the failure of the Government to define “commencement” as at present it can only be defined in terms of the case law that exists. I find Amendment 35 to be extremely helpful because it seeks to define what commencement means. Also, in terms of securing an outcome—renegotiation—which is in the public interest and in the interest of taxpayers, it seems reasonable to have a tighter definition of what commencement means.

Lord Deben: I wonder whether my noble friend could help me. It may be that I am extremely stupid about this, but I do not understand why it is not possible for the local authority, as part of its renegotiation, to insist upon these things in any case. Why can it not say, “As part of the agreement we want to do this, but the deal is you do actually get started in the way that we between us decide is a start.” Is there anything illegal in doing that?

Lord Shipley: My Lords, I am grateful for my noble friend’s intervention. The Minister will be in a better position to reply, but it seems to me that, where there is agreement, these matters can be satisfactorily resolved. The problem arises when there is not agreement, as a consequence of which a decision has to be made. The case law definition of commencement will then be used; it will enable a whole set of minor things to be done and the developer is deemed in law to have commenced development. Amendment 35 defines much more closely what commencement actually means.

7.30 pm

Lord Mackay of Clashfern: My Lords, there is a certain amount of misunderstanding arising in this situation. As I understand it, if the new clause is left as it is, on the planning inspector agreeing a reduction the developer would have no obligation except the statutory obligation. He could not, or the local authority would not be in a position to, redefine the commencement

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of development because the statutory authority would open the way such that the local authority could not close it. The view of the noble Lord, Lord Deben, is that it might be a good idea to permit the local authority to make such an arrangement. However, that is not provided for as yet and the amendment tabled by the noble Lord, Lord Best, seems to deal with this. The local authority might make an even better definition, depending on local circumstances, but having some power in the local authority to persuade or force the developer to get on with it in a reasonable time, if he takes the reduction, seems essential for this to work.

Lord Deben: My Lords, there is an issue here. I do not actually like the way proposed by the noble Lord, Lord Best, because it seems too prescriptive as to how it might be done. I am entirely in favour of this clause. It is very important, in the present circumstances, to find a way of not insisting upon the kinds of costs which were possible at a time in which prices were utterly different. I therefore like the clause but I am concerned that it does not include the possibility of local authorities saying “Yes, okay, the inspector has said that we can reduce the number by this level but the deal is that you get started—and these are the terms of getting started that we want”. In other words, I am not sure that I want to have statutory, public, universal terms because it would seem much better to have it dealt with at local level, and to lay down there which definition of commencement was necessary in this circumstance by this particular local authority.

I am not sure that I like the answer which the noble Lord, Lord Best, has brought forward but my noble and learned friend has pointed to the fact that we need some sort of answer. If we do not have one, people will be getting a deal and then not doing what we are trying to bring this forward to achieve. I do not know whether my noble friend would be right to accept this amendment, but it would be helpful to us if she were prepared, at least, to look again at having some kind of mechanism so that this was not misused, instead of being the very valuable thing which it could so easily be.

Earl Attlee: My Lords, we need to be a little careful about Report stage rules.

Lord McKenzie of Luton: My Lords, we support Amendment 31; indeed, I have added my name to it. Compelling early undertaking is absolutely right when people have had the benefit of a change of Section 106 obligations. Having heard the noble Lord’s reformulation of Amendment 30, we support that as well, since it deals with the point that the Minister raised in Committee.

I understand entirely the thrust of Amendment 35 and what the noble Lord is seeking to achieve by it. I have a slight hesitation about the detail. I am sure it would be a lawyers’ paradise to try to determine whether 50% of the foundations have been laid or whether 50% of a road has been laid, for obvious reasons. Would it be cost, width, depth or whatever? However, that should not preclude an attempt to get something more effective than what is there at the moment, so perhaps that is a task to be done between now and Third Reading.

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Baroness Hanham: My Lords, I thank noble Lords for that debate. The noble Lord, Lord Best, explained clearly that his amendments are aimed at ensuring that development happens. We all want to ensure that happens, as there is otherwise no purpose in this clause. I understand the desire that, in return for an adjusted affordable housing obligation won at appeal, a developer should get on and build. Planning consent is permission to build; it is not a requirement to build. The purpose of this clause is to give developers an opportunity to build, allowing them to review schemes against prevailing market conditions and secure a viable affordable housing agreement. We should remember that without this clause many housing sites will not come forward at all, which is not what we want. Of course, having put in place a revised agreement, we want developers to build, and that is the purpose of the amendment tabled by the noble Lord, Lord Best.

Clause 6 places a three-year time limit on modified obligations made on appeal. If the development is not completed within three years, which is the other side of the coin that the noble Lord referred to—he was talking about commencement while I am talking about completion—the original affordable housing requirement will apply to those parts of the scheme which have not been commenced, so there is a difficulty for the developer in that. Developers are incentivised to build out as much of their scheme as possible within those three years. It will not be sufficient to commence one part of the development to secure the revised affordable housing obligation for the whole scheme.

For example, on a scheme of 100 homes, if 50 units are completed at the end of the three years and the remaining 50 are not commenced, the appeal decisions would require that the original obligation would apply to the remaining 50—so we would go back to 100. If developers are concerned about the viability of their scheme at the end of the three years, they can seek to modify the agreement again. This could be done through voluntary renegotiation or by making a new application under this process.

We believe that the clause ensures that we incentivise build-out and completion. Local authorities are not bound by a three-year decision, but we are clear in our draft guidance that they can follow similar time limits prescribed for appeal decisions. We believe that this decision is best made locally. Where the matter has gone to the planning inspectors, the local authority can of course put its own evidence to the Planning Inspectorate, which could include evidence on commencement of the development. That could become part of the modified planning obligation if the planning inspectors agree to it.

I hope that the noble Lord will take some comfort from our being aware that local authorities have a wide range of tools and powers to encourage development. Those may be through the way they use the Section 106 agreements flexibly or in the way that they support development through investment in infrastructure or the use of land assets. We are aware of local authorities which have introduced clawback agreements to incentivise developments and we understand that those may be appropriate in some circumstances.

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More specifically on Amendment 31, which prescribes a six-month commencement for appeal decisions, I said in Committee that I thought setting a six-month period in primary legislation was too prescriptive. I am particularly concerned that placing a six-month limit to commence development will allow little time for developers to get on site—this is the other side of the coin that we have just been talking about. Not all schemes will be ready to go when they are renegotiated. Regeneration schemes where land is in multiple ownership or where planning conditions need to be met before development can commence could be excluded from this process by the six-month limit. Sites where significant work, such as decontamination, needs to be done to prepare the site for development could be excluded. We want to ensure that we deliver as many homes as possible through this measure, not through an overly prescriptive approach, which could be counterproductive and end up with these measures having no effect.

In Amendment 30, the noble Lord, Lord Best, proposes to require the Planning Inspectorate to introduce a clawback in appeal cases whereby the local authority receives increased funds for affordable housing if the market rises. I oppose this amendment because it requires the Planning Inspectorate to make provision for a clawback agreement, which would impose a requirement that will not be appropriate in all cases. I am also concerned that this amendment might have unintended consequences. In cases where a variable agreement would be onerous and unnecessary, the inclusion of the amendment could discourage developers from appealing. We need developers to engage in this process and ensure they can secure viable agreements and we can then secure the affordable housing.

I will now turn to the new clause on redefining commencement. The definition of commencement and material operation serves a wide range of purposes in planning law. It triggers the payment of community infrastructure levy and Section 106 revenues. Perhaps most importantly, it is used by local authorities to establish whether a development needs planning permission and can form the basis of enforcement action if a material operation has taken place without permission. In short, the amendment would have far-reaching and fundamental consequences that go far beyond its intention, which is to prevent developers from doing a minimal amount of work lawfully to implement a planning permission. The noble Lord spelled that out quite clearly.

Changing the commencement threshold in the way envisaged would not have a substantial effect on the behaviour of developers. Any new definition of commencement would simply create a new minimum threshold for such developers to build to. The additional costs for a developer in doing so would be unlikely to be significant in the context of an overall construction budget. Furthermore, the complexity of the threshold proposed would result in uncertainty and confusion that would affect all parties involved in the planning process, including local authorities. As the definition of development is a highly contested part of planning law, it would be likely to result in a significant rise in legal challenges as the courts interpreted the new definition. Any legal definition of commencement

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should be exactly that: the point at which a development is commenced. It would be counterfactual at best to say in legislation that a building project where the foundations or roads are 49% complete or where only 99% of the pipes have been connected has somehow not legally begun.

In short, while I recognise the problem, this is not the right solution. It would do very little to address the problem, while it would have wide-ranging consequences for other areas of planning practice and have a very significant adverse impact on local authorities, developers and third parties. There is already a power available for a local planning authority to serve a completion notice to deal with uncompleted development. However, a far more productive approach would be to address the underlying reasons for developers delaying their schemes. The Government recognise the importance of this through a number of initiatives, such as the £570 million Get Britain Building fund to unlock stalled sites.

I hope that with these comments the noble Lord will feel able to withdraw his amendment.

Lord Best: My Lords, I am very grateful for the debate that this has stimulated and for the interventions from the noble Lord, Lord Deben, and the noble and learned Lord, Lord Mackay. We have explored an issue and taken it a little bit further than anyone has before in these public fora. These ways of trying to persuade the developer to start building—which is what we are all about—are quite difficult, and it is quite messy to concentrate on defining where commencement really lies. Concentrating on completions of developments which are, obviously, at a later date than my six months for a start, sounds a much improved way of looking at this. I had not appreciated—and I am not sure if others had—that it will be possible for the Planning Inspectorate to place conditions relating to a timescale and a definition of starting on more than simply the reduction in the amount of affordable housing. The assumption has been that it is the reduction in affordable housing that the planning inspector can talk about, and these other, more sophisticated, aspects of getting things going have been beyond the remit of the Planning Inspectorate when these appeals come forward. We are hearing tonight that the planning inspector could, in a way, substitute for the negotiation that has failed at the local authority and developer end. These cases have gone forward only because earlier negotiations have failed. It could be that the planning inspector could substitute for that and come up with a set of requirements that go with the consent to drop the amount of affordable housing.

I am grateful to the Minister for explaining these issues in more depth. I will go away and think about them and hope that, within that explanation, there are the seeds of hope.

7.45 pm

Lord Mackay of Clashfern: My Lords, before the noble Lord decides what he is going to do about this, I would like to air the question of whether the planning inspector has these powers. The noble Baroness assumes that he has these powers, but I am not immediately sure that he would have them because the statute

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prescribes what he can do. She may be right—I am not saying she is not—but it is a critical part of her answer. In so far as it is correct, the answer is, no doubt, a good one, but if it is not correct, the answer is, to that extent, defective.

Baroness Hanham: My Lords, I need to answer this. The inspector will have the power to say that these developments have got to be completed within three years.

Lord Best: My Lords, I beg leave to withdraw the amendment.

Amendment 30 withdrawn.

Amendment 31 not moved.

Amendment 32

Moved by Baroness Hanham

32: Clause 6, page 10, line 1, leave out subsections (4) and (5) and insert—

“(4) Sections 106BA, 106BAA and 106BB of the Town and Country Planning Act 1990, and subsection (5) of this section, are repealed at the end of 30 April 2016.

(5) The Secretary of State may by order amend subsection (4) by substituting a later date for the date for the time being specified in that subsection.

(6) The Secretary of State may by order make transitional or transitory provision or savings relating to any of the repeals made by subsection (4).”

Amendment 32 agreed.

Schedule 2 : Modification or discharge of affordable housing requirements: related amendments

Amendments 33 and 34

Moved by Baroness Hanham

33: Schedule 2, page 43, line 11, leave out “that sub-paragraph” and insert “sub-paragraph (2)”

34: Schedule 2, page 43, line 12, leave out “(1A)” and insert “(2A)”

Amendments 33 and 34 agreed.

Amendment 35 not moved.

Consideration on Report adjourned.

Forestry: Independent Panel Report

Question for Short Debate

7.47 pm

Asked By The Lord Bishop of Liverpool

To ask Her Majesty’s Government what is their response to the report of the Independent Panel on Forestry, published on 4 July 2012.

Earl Attlee: My Lords, because the right reverend Prelate’s Question for Short Debate will now be taken as last business, the time limit for the debate now becomes 90 minutes rather than 60 minutes. Speeches should therefore be limited to eight minutes, except for the right reverend Prelate the Bishop of Liverpool’s speech and the Minister’s speech, which remain limited to 10 and 12 minutes respectively.

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The Lord Bishop of Liverpool: My Lords, you do not need to be a sociologist to know that there are moments in history that reveal the character of the nation. Such was the public reaction to the possibility that something might happen to our forests and woodlands. The people of England discovered a passion for trees that they hardly knew they had. It was a surprise to some, not least because our woodland cover hovers around 10%, whereas Europe as a whole has forests that extend to about 40% of the landscape. Maybe it is because we are less wooded that the people were even more protective of the trees that we do have.

I pay tribute to local people who emerged as guardians of the forests, to the 42,000 people who made submissions to the Independent Panel on Forestry, and to the hundreds of stakeholders who came to our regional consultations. The panel, set up by the Secretary of State, Caroline Spelman, was made up of dedicated experts in the field of forestry and was served by an equally determined and industrious secretariat. Our report and recommendations were unanimous. They captured the public mood and, more importantly, interpreted that mood into policy recommendations. There was robust debate in the panel but never any acrimony, because we were all united in a determination to lay before the Government and the people of England the clearest signposts for a new public policy on forests and woodlands that would serve the country for the whole of the next century.

I am delighted with the Government's response. Although the panel was disbanded on completion of its task last July, I shall shortly convene a meeting of the panel at which members can express directly to the Secretary of State the full range of their views. However, no one can deny that the direction of travel in the Government’s response follows the signposts of the panel’s recommendations, and the Government are to be congratulated on responding constructively to the mood of the nation, expressed so vociferously and articulated so cogently.

Forgive me now for going through this alphabetically. First, on access, forests and woodlands provide the largest leisure facility in the country, with an estimated 300 million visits a year. For the sake of recreation and health, user groups must now work with owners locally to agree the fairest access, each considerate of the needs of the other.

Secondly, on biodiversity, wildlife is affected directly by woodland management. It is a mistake to think that nature, without the symbiotic co-operation of humanity, will protect our biodiversity. The Government must now fulfil the requirements of international obligations on biodiversity that they have helped to formulate.

Thirdly, on conservation, our ancient woodlands are as integral to our cultural heritage as are ancient buildings and landscapes. They are a priceless asset. They must be protected as much as possible from the encroachment of development.

Fourthly, disease and pest control are seriously threatening and require research and resources on a cross-border basis, not least because disease and pests do not respect national boundaries. Each nation must contribute urgently and generously to this work, and the core expertise available at the moment through forest services must be expanded.

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Fifthly, ecosystem services are, simply, vital. Trees deliver clean water and clean air. They protect against flooding and contribute to a low-carbon culture. Speaking very personally now, and without the authority of the panel, I wish that there were some way of linking payment for such ecosystem services to our utility bills. That would show the public their worth and provide money to invest in our ecosystem infrastructure.

Sixthly, forestry expansion and better management require both public and private investment. Creating the woodland industry action plan, as the Government have already done, and renegotiating the rural development programme are both steps in the right direction of stimulating the woodland economy, which in itself will help to green the nation’s economy. Forestry is good value, as the Church Commissioners’ investment portfolio shows; I declare an interest.

Seventhly, guardians will hold the public forest estate in trust for the nation under a parliamentary charter. The Government’s response to this recommendation from the panel could not be clearer. Succeeding the Forestry Commission, this new and evolved body will have important freedoms. It will be set free from the short-term political cycle that is so at variance with the lifecycle of trees, and it will be free to be entrepreneurial, so that within a stated plan of forest expansion it will be able to maximise the potential of all its assets. By buying, borrowing, selling and sowing, it will create more woodland nearer to where people are, not least in and around our urban areas.

The Government have accepted the guiding principle of the panel’s work that a new national policy on trees delivers a triple bottom line of public benefits: social, environmental and economic. Trees are good for people, good for nature and good for the economy.

The Government’s response would gain even more support and traction if they were able to indicate a timetable for the implementation of these recommendations. The sector has been marking time now, unsure of the Government’s intentions. Those intentions are now clear, but could the Minister indicate when they will publish a timetable?

As I said in the foreword to the panel’s report:

“Our forests … are nature’s playground for the adventurous, museum for the curious, hospital for the stressed, cathedral for the spiritual, and a livelihood for the entrepreneur. They are a microcosm of the cycle of life in which each and every part is dependent on the other; forests and woods are the benefactor of all, purifying the air that we breathe and distilling the water of life”.

The voices of the people showed how fertile England is for trees, the independent panel prepared the ground, the Government’s response is like a planted sapling, and the water to make it grow must be the political consensus and will to ensure that these recommendations are now translated into policy. The narrative of faith that has influenced this nation is based on a wise and sacred text that begins and ends with human life centred on a tree. Similarly, I believe that the forests and woodlands of England can provide, as it were, a canopy of leaves through which light and shade are shed for no other purpose than the health of the nation itself.

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7.56 pm

Lord Eden of Winton: My Lords, I am delighted to follow the right reverend Prelate the Bishop of Liverpool. I applaud his most interesting speech and the constructive and comprehensive report of the panel over which he presided. I want to highlight one or two aspects that featured in his report. I particularly welcome the emphasis given to education—the need to involve people and to teach them, as he pointed out, the value of trees, woods and forests and the importance that they represent not just for our pleasure but for our survival. However, I hope that education will not be restricted to visits by primary school children; older people need to know about the value of trees just as much as small children do.

The second point that the report emphasises is the need for access to forests for the purposes of leisure, recreation and tourism. Those activities can be damaging to the very environment that we are seeking to protect in our forests and woodlands. Many decades ago I wrote a report for the Council of Europe on sites of national scientific interest and areas of outstanding natural beauty. I remember that in preparing the report it was clear that too many people going into sensitive environments like woodland settings can, as a result of their footprint and their sheer numbers, cause an enormous amount of damage. Damage was also caused by other leisure activities, and I just hope that whoever runs our country’s forestry activities will recognise the need to control them. Noisy activities such as motorcycling should not be allowed because woodlands are places to be enjoyed in quiet and in a degree of silence. People can absorb what the woods can give to them only if they listen. If they have ears to hear, they will hear what the woodland has to teach them.

The third point I want to stress is the value of woodland, of tree planting, as a role in flood prevention. We have had a lot of experience of floods—too much recently in some parts of the country. If trees are planted in the river source, they will not only stabilise the soil, they will control the tendency of those rivers to flood. It is most important that we do not look simply at flood barriers at the end of the river, we look at the flood protection work that tree planting can achieve at the source of the river.

The Government have now declared themselves as intent upon nationalising the public forest estate, or rather, to put it more delicately, keeping it in the public sector. I hope they will stress the need for the public forest estate in the public sector to engage as much as possible in joint venture activity with the private sector. The forest cover of this country should not be retained solely in the hands of a public sector organisation. Too often, a public sector organisation becomes excessively bureaucratic and expensive, and develops its own degree of inertia.

I hope that the Government will press forward vigorously with their own statement of priorities and principles. Among other things, these are to reduce Government involvement; minimise the amount of regulation; encourage local participation and local initiative; and, above all, work in partnership with other interests. Other interests are well represented by private landlords; by estate owners; by organisations such as the Tree Council, the Woodland Trust and the

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International Tree Foundation; and also by those who are engaged in wood-working enterprises and industries of various kinds. Joint venture, private public partnership, seems to me to be the right way forward.

8.02 pm

Baroness Parminter: My Lords, I, too, thank the right reverend Prelate for securing this debate today and for the important work of his Independent Panel on Forestry. It seemed a model in capturing the public’s mood and their undoubted love for woodlands and forest while, at the same time, achieving the difficult job of coming up with some very practical and workable policies which have secured the consensus of a vast number of stakeholders. I congratulate him.

Equally, I congratulate the Government on their response to this broadly welcomed report, with the majority of stakeholders supporting the commitment of the Government to increase our woodland cover from 10% to 12% with the long-term vision of moving towards 15% and keeping the publicly owned forests in public hands.

How we take this forward is key for the future. I hope that the Minister, in his summing up, will cover these three points. First, on the crucial issue of funding for forestry, we welcome the Government’s commitments during the current spending review period, but the independent panel and the Government see funding through the common agriculture policy as crucial to deliver on these forestry goals. The Government have been making a strong rural development regulation a priority in the ongoing CAP reform negotiations, pressing for more money for Pillar 2, as we need incentives to work with private landowners to deliver more woodland.

In the recent letter to the House of Lords Sub-Committee D setting out the result of the recent vote by the European Parliament’s Agriculture Committee on CAP reform, including the future of the RDR, the Secretary of State outlined that MEPs are not allowing the payment of income foregone for afforestation. Can the Minister offer some clarification on that and the impact that would have on incentivising and achieving the Government’s goal of increasing the amount of woodland cover to 12%?

Secondly, on delivery vehicles, we all look forward to the debate in this House when the Government bring forward proposals for the new operationally independent body to manage the public forest estate. Meanwhile, however, there is a question mark over the future of forest services. The Government say they will confirm the organisational arrangements through which the Government’s forestry functions will be delivered after the triennial review of the Environment Agency and Natural England. We expect the initial conclusions from that in the spring.

The Independent Panel on Forestry supports the retention of the Forest Service organisation. The Forest Service is a small organisation with fewer than 30 members of staff, but has a key role in promoting sustainable forestry and biodiversity. I therefore welcome that the Government are considering the synergies of function between the work of Natural England and the Forestry Service as part of the triennial review.

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As someone who has real concerns about any proposals to merge the Environment Agency and Natural England, I am open to the potential of closer links or, indeed, merging Natural England and the Forestry Service to create one organisation with a strategic overview of all terrestrial landscapes and habitats.

The report of the Independent Panel on Forestry was clear that delivering landscape-scale conservation would require the integration of policy and delivery mechanisms for woods, trees and forests with the wider landscape, for example, by integrating incentives for woodland management and creation with agri-environment schemes.

It is also important that we retain a strong body of advice and expertise capable of influencing government on the delivery of a wide range of agendas where forestry has a decisive role to play, from areas across government as diverse as providing green space for public health to carbon storage.

Finally, on engaging stakeholders, the independent panel’s report rightly challenges stakeholders as to how we can all play our part in delivery. Post the report from Ian Boyd’s tree health and plant biosecurity task force next month, are the Government planning to resource any further stakeholder engagement mechanisms to aid implementation and ensure a sense of shared purpose? Are they looking at the merits of the old England Forestry Forum or the success of the Green Food Project as models to ensure that momentum is kept up and the outcomes we all want for forests are delivered?

8.07 pm

The Earl of Courtown: My Lords, I have an interest to declare which is in the register. I have also been involved as a land manager and a contractor for the past 20 years.

I would like to thank the right reverend Prelate, as other noble Lords have done, for introducing this debate and commend his report for its thoroughness. I also read with interest my right honourable friend the Secretary of State’s response to the report.

There are a few points in the right reverend Prelate’s report that I would like to explore a little further. One of the first matters of prominence raised was calling on the Government to pioneer a new approach to valuing and rewarding the management, involvement and expansion of the woodland ecosystem. The Government referred in their response to the Rural Development Programme, which the noble Baroness, Lady Parminter, also mentioned. I am much interested in whether the Minister can say how this fund could help in those periods where funding in forestry can be very difficult to attain.

Another objective was to increase public access to woodland. In the report, the public estate—in other words, Forestry Commission land—amounts to around 18% of UK forestry. This is not the whole story. I should be most interested to know whether the Minister can give an idea of how much of the remaining part of the forestry estate UK in public, NGO and private ownership provides some form of public access. Perhaps it might be easier to say how much of the forestry estate does not provide any access to the public.

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It has also been proposed and agreed by the Government that there should be more woodland closer to areas of high population. I do not want to appear negative on this subject, but in my book woodland areas considered to be close to urban areas would be within an hour’s travelling. There is high demand for land close to the urban population. An illustration of the value of that is a four-acre paddock close to me for sale at £20,000 an acre. Planting trees on it with reasonable spacing will cost £1,500 an acre. Once trees are planted, the value will drop to about £8,000 an acre, as can be seen by the value of forest land already on the market.

The big difficulty is that if trees are planted on very high-value land, there will be an immediate drop in its value. Encouraging people to plant trees in these areas, whether in the public or the private sector, will be very difficult. Following that, there will be about 20 years of high maintenance costs and very low income before gaining even the lowest amount of income from thinning or whatever. It will be in the region of just a couple of hundred pounds an acre. I of course recognise the social and environmental reasons for woodland, but if we are to increase our woodland by a substantial amount—even 1% or 2% is a substantial amount—we will have to get around that problem.

The report also calls for an increase in the amount of woodland managed to the UK forestry standard from 50% to 80%. Perhaps the Minister will clarify how much woodland managed to the UK forestry standard is grant-aided and whether we have a gap of forestry that has been grant-aided but does not reach the UK forestry standard. Having entered many forestry holdings in the past into management agreements, even then I was horrified by the amount of paperwork involved in the exercise. Last week, having downloaded all 116 pages of the UK forestry standard, I hope my noble friend will listen very closely to me when I say that perhaps we could look at cutting a bit of red tape.

I have also consulted some of my forest manager friends who are very concerned that if management plans become a key driver in securing grant assistance for woodland creation and management, it could be a major disincentive to landowners at large to bring their woodlands into better management or to plant new woodlands. Recent experience with linking grant aid to forest certification has had a similar effect.

Some planting that we see nowadays, particularly by some non-governmental organisations, has provided excellent amenity woodland and public access but has not produced good-quality timber. It is possible to have good amenity and public access, and still grow quality timber. Some amenity timber planting has been planted at three-metre spacing. The outcome of this spacing is poor-quality timber and high maintenance costs. At three-metre spacing, a forester would have just over 1,200 trees per hectare. If he decreased that spacing to 1.5 metres, he would have 5,000 trees per hectare. The higher the density, the less maintenance and the better the quality of the timber.

I could go on on this subject. We have to ensure that we plant the right trees in the right place. That means not just planting in the countryside but structural planting and planting on housing estates where we end

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up planting enormous trees at great expense. We should look at planting far smaller trees and letting nature take its course. They will grow far better, but if they die it would not be that expensive to replace them. I greatly look forward to hearing from the Minister and other noble Lords.

8.16 pm

Lord Framlingham: My Lords, I join the congratulations to the right reverend Prelate the Bishop of Liverpool on securing this debate about trees, which are so central to our national welfare. His panel’s recommendations are excellent, very timely, positive and forward looking. Like us all, I have a huge affection for trees. I founded and ran for many years my own forestry company and I was for some time president of the Arboricultural Association. It is hard to improve on the description of the value of trees given by the right reverend Prelate, although I shall try briefly.

It is hard to believe that trees fulfil so many functions. They take our waste carbon dioxide and give us their oxygen. They provide us with timber for so many uses, including construction, housing and flooring. They provide habitats for birds and insects. They alleviate flooding and stabilise land, to which reference has already been made. They help landscape towns and gardens. Most importantly of all, they are beautiful to behold.

The holy grail, the most important buzzword politically in these days of economic recession, is growth. Trees cannot by themselves solve our economic problems, but they can help a little because they grow. Trees have not heard about the AAA rating, the value of the pound, the national debt or the balance of payments. You plant a tree and, provided you take some care in doing it, it will grow year on year, increasing your investment both in timber and in pleasure. We have every reason in the world to plant more and to look after them.

I want to make just two points. My first point, which has already been touched on, is about the balance between public and privately owned trees, leaving aside the question of access, which I acknowledge has to be handled carefully. I am anxious that there should not be the idea in the mind of the public that one is more desirable than the other. While it clearly is helpful and desirable to have public and government involvement in the planting and maintenance of trees and woodland, I trust it also will always be acknowledged that private landowners planting and caring for their own trees on their own land will always have a huge investment in those trees financially and, more importantly, emotionally.

My second point is about the vexed question of chalara fraxinea, ash dieback, its possible disastrous effect on our landscape and what can be done to prevent similar outbreaks. I do not want to rehearse all the history of how we got to where we are. We are all waiting now to see what the new growing season will bring and then what action, if any, will prove necessary. My concern is how it got here from Europe and the fact that we are squandering the priceless asset of being an island nation in terms of our bio-security.

Since the Plant a Tree in ’73 campaign, the demand for trees has increased steadily. This has coincided with the globalisation of tree diseases as trees are

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routinely shipped around the world. As nurserymen have increasingly imported stock, the situation has been exacerbated by two other factors. First, to protect themselves against the last-minute cancellation of orders because of lack of funding or grant withdrawals many UK growers have used foreign suppliers as a kind of bank to draw on rather than growing the trees. Secondly, UK seed has been grown abroad and reimported as plants to preserve its UK provenance. This has resulted in the importation of trees on a massive scale: 500,000 ash trees alone on an annual basis. Oliver Rackham, a well-known botanist and ecologist, has written:

“It seems that any of the world’s plant diseases is at liberty to enter Britain provided it does so via some other European Union country. By the time the problem has been detected and the bureaucracy has clanked into action, it is too late. Once a tree disease has become established in a country, it is almost unknown for it to be controlled, let alone exterminated”.

It must be possible with the co-operation of all the organisations concerned and with the Government to devise a system that allows for the sensible forecasting of demand, by species, of the number of trees required nationally in the coming years. Without sacrificing the competitive tendering process, surely the nurserymen and the horticultural trade can be given the kind of firm commitment to numbers required that would allow them to expand and grow the trees that we are going to need in the years ahead. We could then be more self-sufficient and reduce our dependency on foreign imports. This would not eliminate the possibility of importing new diseases—only a complete ban would do that and we may have to consider that—but such a commitment would be an enormous step in the right direction, and I urge the Minister to give it the most serious consideration.

Perhaps I could give your Lordships’ House two illustrations. If you go to Christ’s College, Cambridge, and walk through its fantastically ornate and famous gate to the fellows’ garden you will see a mulberry tree under which John Milton is supposed to have sat as he composed Paradise Lost. You could not imagine a more idyllic situation. If you drove up to Wakefield and got the Home Office’s permission to go into the top-security prison there, you would go through a very severe-looking gate into a yard at the back. There is another mulberry tree, standing in the circular island in the middle of the yard. This used to be the exercise yard when the prison was for female inmates. They were allowed to exercise only around this island that contained the mulberry tree. They were not allowed to speak, so they had to mime. This of course is from where we get the mime: here we go round the mulberry bush on a cold and frosty morning.

These illustrations show the part that trees play in all our lives. We must look after the ancient ones because they have such wonderful history, like our own Catalpa trees in New Palace Yard., and we must plant new ones because trees play such an important part in our national life.

8.23 pm

Lord Lyell: My Lords, I begin by thanking the right reverend Prelate for instituting the debate tonight. I also have to declare an interest. If noble Lords glance at the relevant documents, they will find that I purported

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to be responsible for some forests in Scotland. I have enormous interests in Liverpool. In an earlier incarnation, the right reverend Prelate was once kind enough to bring some wonderful primary school children to play harp music, which showed us one aspect of that wonderful city. The right reverend Prelate has spoken broadly. Those of your Lordships who might go to Liverpool are perhaps not aware of an area that I tend to go to, Quickswood and Woolton, together with huge areas of parks. I do not tour round many of the great cities of northern England. There are certainly lovely parks here in London. What the right reverend Prelate has in Liverpool is something of which to be very proud and it is relevant that he has started this debate.

I go to Liverpool for various activities and have been going there for 45 years. Last night, and all the time, there is a blue glow. Interestingly, the son-in-law of my great friend at the blue glow centre—he will be known although he was not on the panel with the right reverend Prelate—is called Chris Starr, and he lectures and teaches. Above all your Lordships will be pleased to know that he put a sharp pin into me and told me to cut down the speech and just concentrate on what is necessary. From the University of Cumbria he has taught me a great deal about forests.

Will the Minister let me know later—not necessarily tonight—about item 6 in the Government’s response, which was referred to by the right reverend Prelate, looking at what is good for the economy? I understand that the benefit of the forestry industry in England and Wales is £400 million per annum. That is the net financial benefit to the nation. There were costs of some £72 million, which have gone out, and at the moment land sales are frozen. That does not necessarily worry one too much. Above all, can my noble friend confirm and give us any good news about resilience in the forestry industry? There is a great partnership of public and private owners throughout the country.

Item 6 of the Government’s response states that forestry is good for people and the right reverend Prelate referred extensively to that. Every single one of us—the right reverend Prelate has the figures—sees, enjoys, visits and relaxes in the forests. Here I may clash ever so lightly with my noble friend Lord Eden, though this may not be something covered by tonight’s debate. Not 50 miles from where he and I used to meet in Scotland, one of the most valuable sources of income for the Forestry Commission, doing minimal damage, on one day in the year, was car rallies. If my noble friend thinks that everything is sylvan rural and that you can hear a pin drop, he might wish to hear some of the forest machinery at work, but he is absolutely right that a forest should be a place of enjoyment and relaxation.

As I have said, it is above all good for people. I found a headline about a bit of education. We are lucky that this aspect is in Scotland, and more and more in England and Wales, and in Liverpool too; it is about encouraging youngsters and older people of all types to come out and learn to appreciate trees and forestry that they might not otherwise have looked at. Stressed in the Government’s reply to the wonderful report by the right reverend Prelate and his colleagues, and particularly important, are local participation

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and the involvement of local communities for their advice and thoughts. In almost all cases, they produce very constructive results, especially when foresters join in. They might come and ask whether you have tried, for instance, kestrels, on a Lodgepole Pine, which apparently kept the voles down, but until the RSPB came nobody had necessarily thought of that. Participate as far as you can with local communities.

Perhaps my noble friend can write to me on this. I understand that we have seen a figure, and that it is hoped that 12% of England will be forested by 2060. I am not too sure what the percentage is as of today, but I know that many years ago I was catapulted off to Northern Ireland, where I was given the responsibility of agriculture. Guess what we had there—forestry. I seem to recall that the figure for England, Scotland and Wales was something in the region of 10%, but I would be most grateful if my noble friend could indicate tonight or later how near we are to that target figure of 12%. In 1984, I noted that in France and what was then West Germany the relevant figure for land covered by forestry was 22% and 23%. Perhaps it is dangerous to talk of like for like, when they have different climates and different types of tree.

The report has been very encouraging, but the finance will take a generation. I am not married, but for those who are married, it will take virtually until their grandchildren are around before they see the benefit and, above all, note what is there.

I make one main, lasting plea. My kind friend in Temple Sowerby in Cumbria asked me to ask the Minister to see what his department could do to use the existing land that is available for planting or is not being fully utilised for forestry purposes. If he could look at that, it would be the first step. Then one can expand elsewhere, planting suitable trees in suitable land.

I am most grateful to the right reverend Prelate. I very much look forward to hearing from the Minister and even to getting my knuckles rapped by him.

8.32 pm

The Earl of Caithness: My Lords, I, too, thank the right reverend Prelate for securing this important debate today. It is always good that this House, which is so knowledgeable on forestry, has the chance to debate it. I declare an interest as a surveyor, although not one who has practised for some time; however, when I was practising, I did quite a lot of forestry.

I want to focus on three parts of the Statement that my honourable friend the Minister of State made on 31 January about the future of forestry. My heart lifted when I read that the Government are going to review the “wider forestry functions”. This is a wonderful opportunity to sort out the Forestry Commission. I have disliked it ever since I started to learn about forestry; it is judge, jury, prosecution, defence and practitioner all in one. It is totally inappropriate these days that all those functions should be held in one body. It plants the wrong trees in the wrong place and regularly lags behind the pace of change of the private sector, which is totally in hock to the Forestry Commission and has to follow its bad practices of even-aged, single-block woodlands, followed by the dreadful

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desecration of clear felling. Nothing could be more unnatural. We are not good at forestry in this country, but we are very good at growing trees in straight lines, sawing them flat and bulldozing the remains into piles. That is not what I call forestry.

For 40 years, I have been saying that we should move to mixed, uneven-aged forestry, with no clear felling. I have advocated that, and I hope that now is the right time for Her Majesty's Government to insist that at least half the state forests should be converted to this type of management. That would require massive retraining and education to make our foresters proper foresters in this country. We would have to bring in overseas experts, who do this well, to train them—but if the Forestry Commission and the state sector were doing this, it would encourage the private sector to do it and fulfil all the aims of what the right reverend Prelate is trying to do. You would get better disease control, better diversity and better wildlife, as well as better economic return from following that type of management, if done properly.

I move on to the future of forestry. To paraphrase part of what my noble friend Lord Courtown said, “It’s the economics, stupid”. There is only one tree in this country that is economically viable, and that is a Sitka spruce. Some 80% of the timber produced in this country is from that tree. There is a good market for its timber, and it is producing some 3% to 4% annually biological growth. That used to be a poor return, but today it is a very good one when compared to other investments. The land prices continue to rise. As my noble friend Lord Courtown said, there is a differential between agricultural land and forestry land.

So Sitka spruce is good, but what about the rest? They range from variable to just acceptable to disastrous, unless one has top quality hardwoods. Ash and larch are a disaster at the moment because of disease, and oak might well go that way soon. So let us look at what has happened to prices. The coniferous standing sales average price index shows that there has been a 58% decline in real terms since March 1985 to September 2012. That is a staggering loss for landowners and, until that situation is rectified, there is only one economic tree available.

With regard to hardwoods, the right reverend Prelate said that we must have a plan for the whole of this century. That is about three-quarters of the time it takes to grow a decent stand of oak, so we are not looking at a 100-year programme but at one of at least 200 years. Of course, our hardwoods have been decimated by two world wars. The whole planting system is out of kilter and we have a lot of catching up to do. Perhaps one chink of light is thinnings, which have been a disaster area for so long, but they are beginning to show some sort of return because so much is now being used for fuel.

My third point is that we need to plant more land. However, we must plant the right trees in the right places. The Forestry Commission has planted 72% of its land with conifers, but in the private sector the figure is only 17%. That is a much more interesting figure. If we plant 50% more woodland, as the right reverend Prelate says in his report, what will it mean? He also wants the land cover to rise from 10% to 15%. That would roughly take us back to what this country

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had at the time of the

Dome

sday Book

. To plant that amount of land would require about 650,000 hectares, which is about the size of Cumbria. For noble Lords who are not very good on anything north of Watford, that is more than the size of Kent, Surrey and Sussex put together. It is a fair chunk of the country.

If the only tree that is economic to grow is Sitka spruce, the only land that should be used is in the north of England. The right reverend Prelate now faces a dilemma because he wants trees to be planted much closer to the towns, which is right; there should also be more trees down south. How will those trees be funded? If they are to be recreational trees, which people can go out and hug and which make them feel better—I fully agree that that is essential—who will fund them? Will it be taxpayers? Have the Government got taxpayers’ money for that? Unless the Government give considerably more subsidies and good grants to those landowners who are prepared to use their land for a loss-making enterprise—they will have to look more than 100 years ahead—with the best will in the world, that will not be done.

As this is a very long-term operation, the dark cloud on the horizon in forestry terms is climate change. If anything like the worst predictions come about, we will not be able to grow the kind of trees that we have now and to decide now about hardwoods, which might not be growing in the same places in 50 or 60 years’ time, is another disincentive. That makes it very difficult for the Government to sell that to the private sector and to their own state arm, but we need to take it into account because if this country warms up or we get more gales and more wind blow, we will have to plant different areas with different species. We have not been good at that in the past and I fear that we might not be very good at that in the future.

8.40 pm

Baroness Royall of Blaisdon: My Lords, I begin by thanking the right reverend Prelate the Bishop of Liverpool for this debate, but more importantly for so brilliantly chairing and guiding the independent panel on its journey through the challenging but beautiful landscape and livelihood of our forests and woodlands to a superb report on their future and the social, environmental and economic opportunities that they offer. He made a splendid speech today and I wholeheartedly agree with his ABC, but I also rather like the idea of linking the benefits of our trees and forests to our utility bills, and I hope that that can be explored.

The panel’s report gave us hope after the depressing, dangerous and quite extraordinary proposals from a Government willing to sell off one of our most precious assets: our forests and woodlands. I also take this opportunity to pay tribute to the terrific campaigns that swiftly grew and gave powerful voice to our concerns, specifically my own Hands off our Forest, which was instrumental in bringing together thousands of members of the public under the Forest Campaigns Network and helped to inform the panel’s deliberations.

I welcome the positive tone of the Government’s response to the report, their commitment to retaining the public forest estate in public ownership, the rescinding of the policy of disposing of 15% of the estate, and

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their commitment to expanding our public forests. I have to disagree with the comments of the noble Lord, Lord Eden, on the public forest estate, which I believe is well and sustainably managed and is much more efficient in many ways in its productivity than the private estates are. To the noble Earl, Lord Courtown, I say that in the Forest of Dean we have good access, we have great social benefits and we have a well managed sustainable forest with excellent timber.

In answer to some supplementary questions in this House a couple of weeks ago, the Minister hinted that we might expect a Bill to be announced in the Queen’s Speech. I would welcome that, but I would also suggest to the noble Lord that such a Bill should be subject to pre-legislative scrutiny to ensure maximum opportunity for consultation. I am extremely concerned about the much valued and multi-expert Forestry Commission, both its future and its current situation. I do not agree with the comments of the noble Earl, Lord Caithness, although he was right to point out that our forests were decimated by two world wars. In the Forest of Dean, our forest was decimated by the Armada and by Trafalgar.

The Forestry Commission has already suffered massive cuts, yet its work increases by the day, especially on diseases such as ash dieback disease. Today in Eastleigh, I happened to meet Forestry Commission people from the New Forest who, like my friends in the Forest of Dean, are overburdened and deeply anxious about their future and about the effect that the cuts will have on the viability of the proposed new management organisation and the implementation of the proposed policy. I again ask the Minister for confirmation that there will be no further redundancies and no further cuts to the budget, and for his assurance that the Forestry Commission will be adequately funded. Like the noble Baroness, Lady Parminter, I am concerned about the future of forest services and the retention of its invaluable expertise if there is to be a merger.

When considering budgets, I urge the Government to take a holistic rather than a silo-based approach, looking at the public benefits of our forests. In addition to the green economy, which has massive potential for expansion, mental and physical health as well as the social and wider environmental and biodiversity benefits should and must be taken into account. The independent panel informed us that,

“If every household in England were provided with good access to quality green space, an estimated £2.1 billion in healthcare costs could be saved. And the social costs to the impacts of air pollution are estimated at £16 billion a year in the UK”.

Many things should be taken into account.

The new operationally independent body is to have,

“the ability to hold the assets”—

—the land and trees comprising the estate—

“in trust for the nation”,

but nowhere does it say whether it is to be freehold or a leasehold vested in the guardians or the trustees. I would be grateful for clarification; likewise about the guardians. The Government’s response appears to have substantially watered down the role of the guardians when compared with the intention of the independent panel.

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Who will those guardians be and what will the balance be between industry and community and between environment and economics, and who will appoint them? Indeed, how will the independent body itself be constituted and appointed, and how will the contents of the charter be agreed? As the right reverend Prelate said, the independent panel recommended that the quantity and quality of access to woods be increased so that access to woodland should be the norm. I understand that one way in which the Government are looking to increase access is through developing rights of way improvement plans. In the light of a recent Ramblers Association report showing that nearly 70% of councils have cut their rights of way budgets over the past three years, will the Minister ensure that the necessary resources are in place for local authorities to review and develop these plans?

Many noble Lords have spoken about access to the private and public estate. The independent panel’s report suggests that,

“The public forest estate represents more than 40% of accessible woodland in England despite representing only 18% of the total woodland area”.

That suggests that access to the public estate is far greater than access to the privately owned estates. As a forester I have to mention a specific concern of my friends in the Forest of Dean. The Government’s policy statement recognises,

“the unique historical, environmental and cultural characteristic of the living, working landscapes in its individual forests and woodlands, such as the New Forest and Forest of Dean”.

That echoes the words of Lord Mansfield in this House on 1 July 1981 when he said that the Government recognised that the Forest of Dean was unique. On that occasion the Forest of Dean’s unique qualities secured exemption from the power of disposal granted by the 1981 amendment to the Forestry Act 1967; it was the only forest in the United Kingdom to be so exempt.

Today, however, we seek something more than protection from disposal. We expect the new operationally independent body to respect, protect and sustain the history, environment and the natural and cultural heritage of our populated working forest. I will be looking to Parliament to impose on the new body the duties to secure these and grant it the necessary powers. I say that having regard to the more limited aspirations in the Secretary of State’s statement that:

“The new body will have clear statutory duties, powers and functions focused on maximising the economic, social and environmental value of the Estate, including a requirement that it should improve the financial sustainability of the Estate”.

We must not lose sight of the fact that people live and work—for example, Freeminers—in my forest, the Forest of Dean.

I end where the right reverend Prelate began. Trees are good for people, nature and the economy. They are vital to the future well-being of our nation. I therefore trust that we can now move forward to implement, through legislation, the recommendations of the independent panel’s report.

8.48 pm

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley): My Lords, I start by saying how grateful I am to the

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right reverend Prelate the Bishop of Liverpool for his leadership of the independent panel and for calling this debate today. Before going further, like him, I have to declare an interest—in my case as a woodland owner and lover. Under his leadership the Independent Panel on Forestry brought together senior experts for the land management, forestry, wildlife charity and wood business sectors, and produced an excellent report, setting out a compelling vision for the future of England’s trees, woods and forests. I am grateful to him for his kind words about our response to his panel’s report.

In his introduction to that report, the right reverend Prelate commented how, as a society, we had lost sight of the value of trees and woodlands. The panel’s report challenged all of us—the Government, the forestry sector and society as a whole—to value our nation’s woodlands more. We have embraced this challenge with passion and conviction. Our Forestry and Woodlands Policy Statement, published on 31 January, addressed all of the issues raised by the panel, and went further by setting out a new policy approach to our forestry responsibilities based on the clear priorities of protecting, improving and expanding our woodland assets. It also recognised the scope for realising more of our woodlands’ value through a better understanding of the benefits they provide and the importance of ensuring that we have the most effective and efficient delivery arrangements in place. It included over 30 new steps that my department and the Forestry Commission will be taking and it invited all stakeholders, including those involved in the panel, to work with us to deliver the new woodland culture envisaged by the panel.

At the heart of this new policy statement is a firm commitment to the public forest estate. It will remain secure in public ownership for the people who enjoy it, the businesses that depend on it and the wildlife that thrives in it. To achieve this, we will set up a new operationally independent body to manage the estate and hold it in trust for the nation. It will have greater independence from government, greater freedom to manage its resources sustainably and a clear remit to maximise the income it generates from the estate through entrepreneurial activity. The estate will, however, remain firmly in public ownership and the right safeguards will be in place for it to operate for the long-term benefit of people, nature and the economy. Our statement also recognises that there is an important job for the Government to do with the wider woodland and forestry sector, providing it with appropriate leadership and support so that we can grow our forests and protect what we have.

Last year’s outbreak of Chalara ash dieback, to which my noble friend Lord Framlingham referred, reminded us that our most urgent priority is to protect tree and plant health. I had the opportunity to see for myself the effects of Chalara fraxinea in Wayland Wood in Norfolk. I would like to thank my noble friend for his helpful suggestion about the benefits of more advanced notice of requirements for saplings. We are giving this careful thought.

In recognition of the scientific advice that it will not be possible to eradicate Chalara and that, on the basis of the experience in Europe, there is no effective treatment, we are now focusing our efforts on minimising

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the impact of the disease on our economy, environment and society, and discovering how we can build resilience to this and other tree diseases. The next step will be the publication of an updated control plan at the end of March, which will set out our approach around four key objectives. They are slowing the rate of spread; developing resistance in the UK ash population; encouraging citizen, landowner and industry engagement; and building resilience in UK woodland and associated industries.

In addition to the control plan, we have introduced tighter controls on the import of native tree species and established the independent expert task force—convened by Defra’s chief scientific adviser, Professor Ian Boyd—to examine further ways to prevent plant pests and pathogens entering the country. This task force will report later this spring.

Recognising the long-term investment needed into tree health, we have allocated £8 million from the existing but unallocated evidence budget for new research into tree health over the next four years and are working with partners and stakeholders to take forward further research. The Forestry Commission has also increased investment in tree health research from its existing resources by 30% over the next 3 to 4 years. In addition to protecting what we have, we also need to make more of what we have. This means improving our woodlands in order to help drive economic recovery.

Just under half of our woodlands in this country are unmanaged or undermanaged. We want to encourage landowners to bring neglected woodlands back into management, improving their resilience, supporting economic growth and delivering benefits for wildlife. To do this we need to remove barriers preventing them from doing so and to develop further the markets and supply chains that will help them realise an economic return from their woodlands. We therefore warmly welcome the initiative to develop the industry’s new action plan under the leadership of Dr Peter Bonfield. It is one of the most exciting developments for the sector in a generation.

Making more of what we have also means maximising the social contribution of our woods and forests, including recognising the health and educational benefits that they provide and supporting communities in playing a greater role in management of their local woodlands. We want to improve public access to our woods and forests, particularly those close to towns and cities, so that the greatest number of people can enjoy them for exercise, leisure and recreational purposes.

The panel rightly encouraged us to take the long-term view. We need to act now to ensure that we have resilient woodlands and a secure supply of timber in the future. England’s woodland cover currently stands at just over 10%, double what it was a century ago. We believe that there is scope for increasing this cover further to deliver economic, social and environmental benefits. We will therefore work with others to expand our woodland resources by creating new woodlands and increasing existing woodland cover where it will most benefit the economy, communities and the environment.

We want to see better quality outcomes for the environment, the economy and society, and that involves the contributions of all our network bodies. We are

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putting the public forest estate on track towards a sustainable long-term future in public ownership. It is right that we also consider our broader forestry functions alongside the outcomes of the triennial review of the Environment Agency and Natural England and the conclusions of the Tree Health and Plant Biosecurity Expert Task Force. We fully recognise the important work that our forestry experts within the Forestry Commission currently do and will ensure that any changes strengthen our national forestry expertise.

I turn now to the questions asked. The right reverend Prelate asked about the publication of a timetable for implementing the commitments. My department and the Forestry Commission are currently developing an implementation plan for the 37 commitments in the statement. This includes setting up significant projects, such as that to establish the new public forest estate body, and we will set out our progress in implementing these commitments later in the spring.

My noble friend Lord Eden referred to the value of silence. I agree with him about woodland noise rather than the noise of motors. I think there is—dare I say it?—a place for both, although I share his personal preference for the predominance of woodland noise. He asked whether leisure facilities have an adverse affect on the environment. I agree that there needs to be a fair balance struck between the two. He asked about the role of the private sector in the public forest estate. I agree with the points that he made. The public forest estate already works closely with private sector partners, including on joint ventures. My noble friend may be aware of Go Ape!, which is an excellent example of a joint venture with the private sector. We have made it clear that we will expect the new body to act entrepreneurially and work closely with the private sector. He made a point about the role of trees in flood alleviation, and I agree with him on that.

My noble friend Lady Parminter asked about funding through the common agricultural policy. She will know that we are currently negotiating the new rural development programme and very much hope that this will provide resources for the future. We cannot make any firm commitments about how much will be available to support forestry initiatives at this stage. We will, however, be consulting on its objectives in the spring. She asked about the functions of the various forestry bodies in the context of the triennial review. We have confirmed that we intend to retain forestry expertise within government and will set out our plans for delivering forestry functions after the triennial review has reported.

We are now considering the functions currently delivered by the forest services directorate of the Forestry Commission alongside the work to review the functions and form of the Environment Agency and Natural England in their triennial review. This work is separate to but following the same principles underlying that review, namely better integration, greater affordability and improved service to achieve better quality outcomes for the environment, economy and society. We will confirm the organisational arrangements through which the Government’s forestry functions will be delivered after the triennial review reports its preliminary conclusions in the spring.

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The noble Baroness asked about stakeholder engagement. We agree that it will be vital to involve stakeholders as we implement and build on the policy statement. We have established the National Forestry Stakeholder Forum and have committed to bringing it together again to report on progress later this year. We are also including clear stakeholder engagement strands in the new projects that we are establishing to develop the new public forestry safety management body and to review the functions of Forest Services.

My noble friend Lord Courtown asked about the UK Forestry Standard active management plans. We recognise concerns over the size of the documentation. We have recently published a new quick-start summary of the standard aimed at enabling more landowners and businesses to understand and use it.

I apologise that I have run out of time. There are a lot of questions that I have not yet answered. I will take advantage of the invitation of my noble friend Lord Lyell to write to him about his question. May I write to other noble Lords?

I will try to address a couple of the important questions asked by the noble Baroness, Lady Royall. She said that I hinted that there might be a Bill in the Queen’s Speech. I actually said that Governments zealously guard the secrecy of what is in the Queen’s Speech. Her own Government did that, I am sure, as much as we do. She suggested that the Bill should be subject to pre-legislative scrutiny. That is a suggestion that I will take back, if I may.

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The noble Baroness asked about redundancies and cuts. We continue, as she will know, to face very challenging financial circumstances, requiring hard choices to be made across the whole public sector. The Forestry Commission has had to bear its share of the cuts that we have had to make to bring public expenditure under control. The department has confirmed the Forestry Commission’s provision for 2013-14 at £39.2 million and we provided an initial £3.5 million as cover for loss of income from woodland sales that were to have been made, making a total of £42.7 million.

The noble Baroness asked about a charter and what a guardian will do. We will consult on the finer details of the organisation’s shape, structure and remit in due course and I hope that she will contribute to that process. I will write on the other questions, if I may.

Delivering on the vision of the panel and the objectives set out in our policy statement calls for creative thinking and partnership working to protect, improve and expand our woodlands and forestry assets. Success will see our environment, wildlife and economy thrive and create the new woodland culture that we all want to see.

Groceries Code Adjudicator Bill [HL]

Returned from the Commons

The Bill was returned from the Commons with amendments.

House adjourned at 9.03 pm.