Clause 207 — CIL regulations: general

Orders of the Day – in the House of Commons at 6:45 pm on 24th November 2008.

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Lords amendment: No. 160.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I beg to move, That this House
disagrees with the Lords in the said amendment.

The amendment would provide for a 60-day period during which either House may debate or pass a resolution on the draft community infrastructure levy regulations or refer the draft regulations to any Committee for a report. The Secretary of State must then respond to any debate, resolution or report, including by the other place, before this House may give approval to the regulations. The amendment followed an earlier Opposition Back-Bench amendment tabled in the other place that proposed that all CIL regulations should be subject to affirmative resolution of both Houses of Parliament. That amendment was rightly defeated and fell.

The House will be aware that clause 207(2) provides that CIL regulations are made subject to the affirmative resolution of this House only. It is the Government's view that that is appropriate since CIL is a financial matter. The House might like to note that the Bill has been in this form since it was published. It is also worth noting that this House did not at any stage seek to change that to give the other place a role. Not a single amendment was tabled in Committee in this House on this issue.

This is a financial matter. It is a matter for this elected House of Commons. For those reasons, I ask it to reject the amendment.

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Photo of Jacqui Lait Jacqui Lait Shadow Minister, Communities and Local Government

I acknowledge that we did not discuss this issue in Committee. However, the amendment goes to the heart of our disagreement with the Government on the community infrastructure levy. The Minister will remember that we tabled many amendments in Committee. In fact, we objected to this aspect of the Bill from Second Reading onwards. My hon. Friend Mr. Pickles—he was delighted to receive the Minister's praise about his local development framework, although he says that it is not working in the way set out—and I made the accusation that CIL was akin to ship money, because it was taxation without parliamentary approval.

We have been suspicious all along about CIL because of the original references within the Bill to land values, and we will be able to thank the Government for accepting our recommendations and removing all references to land values should we reach that stage. However, the initial references to land value essentially meant that there was a taxation element to the community infrastructure levy. There was also a reluctance, to put it politely, on the part of the Government to repeal the Planning-gain Supplement (Preparations) Act 2007, which if it remains on the statute book will allow CIL to be set up to fail, which was always at the back of my mind with this policy. The Government have sort of conceded on that, and there is an agreement in one of the amendments that the Treasury may repeal the 2007 Act. The House might like to note that I have tabled an amendment that it must repeal it. Until the references to CIL as a tax are out of the Bill, no one will believe that it is anything other than another form of taxation.

Our problem with the Government's disagreement with the Lords on Lord Jenkin's amendment is that it reinstates the argument that CIL is a tax. One of the difficulties that we have had throughout our discussions on CIL is the sheer lack of information about what it would be, how it would constituted, what form it would take, and who would be the charging authority—the Secretary of State or someone else. Again, just in case we do not get to that bit, I acknowledge that the Government have removed references to the Secretary of State as the charging authority. The wording now relates only to local authorities, which is what we argued for all along.

The Government are denying the House of Lords the ability to consider and, if it wishes, to vote on the regulations on CIL. Although the House of Lords graphically said that CIL had moved from skeletal in its detail to anorexic, we still know little about it and it is not clear whether it is a tax or a levy collected by a local authority. We disagree with the Government because we wish to make it as clear as possible that CIL is a levy. It is not, and should not be, a tax.

Part of the debate in the Lords was about the fact that there is no clear precedent on what financial matters can and cannot be discussed there—other than, of course, the well-known exception of the Budget. Lord Jenkin cited the fact that both Houses have discussed national insurance, council tax, business rates, the business improvement district levy, the climate change levy, and other charges. One or two of those are collected centrally. The community infrastructure levy is allegedly not going to be collected centrally; it is going to be collected by local authorities. The crucial difference is that the money raised from the levy is not going into the Consolidated Fund. Therefore, it is not taxation; it is a levy agreed between a developer and a local authority. It is appropriate that the Lords, who are—dare I admit it?—much more expert than we are in many areas, should consider the regulations.

CIL is still not clear; there is much work still to be done between the Government, industry and the professions involved in development. It is crucial that the regulations be examined in great detail when they come before the Houses of Parliament. It is absolutely correct that the House of Lords should be invited—indeed, should expect—to scrutinise the regulations, which will benefit from its scrutiny. If the Government are not prepared to concede that their lordships have a real role in ensuring that CIL is as workable as possible, I will have to return to my original suspicion—that the Government regard CIL as another form of taxation, that the planning gain supplement has not gone away, that what the Government have said so far is merely warm words, and that the development industry is facing another tax in these difficult times when they are not able to do much, if anything, in the way of development.

If and when better times return, the industry will face another tax, and the implication of another tax is that it will take even longer to build the houses and development needed to get this country going, so that it can meet the challenges of the 21st century in very different circumstances. I therefore support the Lords in their amendment, and will be voting against the Government.

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Photo of Julia Goldsworthy Julia Goldsworthy Shadow Secretary of State for Communities and Local Government, Department for Communities and Local Government 7:15 pm, 24th November 2008

We Liberal Democrats welcome Lords amendment No. 160, which improves the Bill by seeking to reassert the role of the other place. It is a matter of great regret that the Government are attempting to freeze the second Chamber out of considering important regulations. The Minister argued that we are talking about a matter of financial privilege for this House. That sets a dangerous precedent for other regulations, and is not consistent with the consideration that the Lords give to other issues, such as council tax and business rates, which are both collected locally, and the business improvement district levy. Why should the CIL regulations be any different from regulations on those issues?

The Government have rightly removed the Secretary of State from the list of CIL charging authorities, so it is clear that we are talking about a matter for local determination, and not national taxation. The House of Lords Delegated Powers and Regulatory Reform Committee accurately reported that the receipts from CIL are not to be paid into the Consolidated Fund, but will be spent by the receiving body. Crucially, it also reported that key clauses that the legislation will leave to regulations are not obviously financial. The regulations relate to liability for the charge, charity law, rights of appeal and compensation, all of which are issues of legislative principle, not financial privilege.

Baroness Hamwee, my colleague in another place, argued that the provisions are so ill thought out that clause 207 should be excised altogether and brought back in another Bill, when Ministers know what they want to do. Instead, the Government have tried to put the charge on the legislative express train, whose final stop will be a 90-minute debate in a tiny Committee of this House.

Unfortunately, this is not the first assault on the role of the other place; Ministers have had a go at doing the same thing before, with proposals to thwart the role of the House of Lords in deciding on secondary legislation. The Joint Committee on Conventions looked into the issues in detail in 2006, and comprehensively rejected the case for impeding the ability of peers to say no to regulations on occasion. Indeed, it found, quite specifically:

"There are situations in which it is consistent both with the Lords' role in Parliament as a revising chamber, and with Parliament's role in relation to delegated legislation, for the Lords to threaten to defeat an SI. For example...when the parent Act was a 'skeleton Bill', and the provisions of the SI are of the sort more normally found in primary legislation".

Part 11 of the Bill is so skeletal as to be positively emaciated. That is why we tabled amendment (a) to Lords amendment No. 160—to restore the basic right of a second Chamber in a bicameral Parliament to reject, in the last resort, a legislative proposal of which it does not approve. Ministers sometimes seem to forget that statutory instruments are legislation and should be treated as such. It is only right to treat them in that way, in terms of process, because we get better regulations as a result. The amendment is a welcome step forward.

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Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

Given that we are talking about matters that are not subject to the Parliament Act, is the hon. Lady saying she believes that the other place should have a right to veto legislation passed by this House?

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Photo of Julia Goldsworthy Julia Goldsworthy Shadow Secretary of State for Communities and Local Government, Department for Communities and Local Government

No, not a veto. I just think it is appropriate that the treatment of regulations made under the Bill should be consistent with the treatment of other regulations. The House of Lords has a right to consider issues such as council tax, business improvement districts and the levies that I mentioned, but are not given financial privilege; I see no reason why the regulations that we are discussing should not be viewed in those terms.

Almost all the substantial improvements made to the Bill are the result of pressure in the other place. It seems inappropriate to exclude the Lords from the process of putting flesh on the bones of this legislation. Peers have succeeded in getting some detail in the Bill, which is an improvement on what we had in this place. The process has proved that they are well placed to make rational, reasonable improvements as a result of genuinely cross-party consensus. On climate change, commons and open spaces, national policy statements, cross-examination during planning hearings, and people's right to avoid nuisance, the House of Lords has made a real difference to the Bill. It is better for their work on it, and the Minister should recognise that by withdrawing his opposition to a sensible amendment. He should allow another place to do its work, as we do ours. Those of us who believe in a bicameral Parliament should support the amendment.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Lords amendment No. 160 was introduced on Third Reading in another place. It would put in place a new procedure for the Lords' role in secondary legislation. As such, it would create a precedent in the constitutional relations between this House and the other place. It is not appropriate to make such changes and precedents, which could affect other forms of secondary legislation, at the tail end of a Planning Bill.

I return to the principal point: the provision is on a financial issue that should rightly be a matter for this elected House of Commons. Since the Bill's publication, the provision has been that there would be an affirmative procedure for the CIL regulations. That provision was not subject to any proposed amendment in any of its stages in this House. It is not appropriate to make the change now, and therefore if Opposition Members press Lords amendment No. 160 to a Division, I encourage my hon. Friends to reject it.

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Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 275, Noes 204.

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Question accordingly agreed to.

Lords amendment disagreed to.

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