My Lords, I beg to move that this Bill be now read a second time.
I thank all noble Lords who will speak in the debate today. I am very grateful that, despite the late start, so many are committed to the Bill and willing to make their expertise available to the House. I consider this to be the beginning of our conversation. I want to make myself available during the passage of the Bill. I shall be here most of the summer. We can continue our discussions on it in many different forms. I look forward to that because we are discussing an important Bill which will have a profound impact on our ability in the future to make use of scarce and unpredictable resources.
The Bill has three sections: the first deals with nationally significant infrastructure; the second makes further changes to existing planning regimes; and the third deals with the Community Infrastructure Levy. I will focus primarily on the first part because, with no disrespect to the second and third parts, I think that is probably where most of our debate will lie in the House.
There is a wide degree of consensus that the present system is quite simply not fit for purpose. Parts 1 to 8 are therefore about modernising our planning system so that we and future generations can meet the challenge of climate change while also meeting rising demand, which is generated, as we all know, not least by an ageing population. We have to ensure that there will be sufficient, reliable and affordable power to heat our homes, power our technologies, industries and vital services; and to guarantee sufficient clean water and sewage systems, and efficient transport for goods and services.
In the simplest form, and on that scale, infrastructure means providing for the fundamentals of a sustainable society and economy, and doing so in a way which is accountable, careful, affordable and transparent. In turn, it also means ensuring that national benefits are balanced fairly against local impacts.
Changing the planning system to meet these challenges—and to ensure it becomes greener in the process—means a major and essential break with the past. Let me explain why that is necessary. I take as an example the need to provide for future energy security. That is particularly salient at a time of rising fuel prices. We need to plan for energy security and therefore for diversity of supply. In the next few years we will have to replace generating stations with a capacity of 17 gigawatts. That is 22 per cent of the UK's electricity generating capacity.
To achieve this, we are consulting on proposals that will deliver 30 to 35 per cent of our electricity from renewable sources by 2020. The timescales for energy are no less than timescales for water, waste, and transport. They are long term and complex, and the implications of failure of foresight and delivery are profound. We need to invest and to take decisions now on individual projects if we are to meet those deadlines and national needs.
All the evidence—not least the Barker and the Eddington reports which laid the foundations for the Bill and which documented the scale and implications of failure—shows that the current planning system simply will not allow us to do that. Those failures come about due to a number of factors: first, there is no clear policy framework. Policy-making and decision-making are hopelessly confused. The function of the planning inquiry should be to interrogate individual projects, assess local impacts, and to decide whether they should be built in the place and manner proposed. However, in practice, inquiries into individual projects are frequently hijacked by the wider and more contentious debate into the merits of national policy, and whether any sort of infrastructure should be built at all.
Secondly, there are numerous overlapping consent regimes. Heathrow Terminal 5 required 37 applications under seven pieces of legislation. The London Array wind farm project, which has the potential to provide 1 gigawatt of green energy—that is 750,000 homes—required applications under five pieces of legislation. Some parts of the application were decided by local planning authorities and others by Ministers in CLG and BERR. The inquiry processes for each of these regimes are different, resulting in confusion, duplication and delay. The delays affect renewables and progress towards a low carbon economy. On average, it takes 20 months for a large onshore wind farm to get planning permission.
Thirdly, applications are sometimes not well prepared, let alone challenged or even consulted on at the local level. Promoters simply do not engage early enough or closely enough with interested parties and local communities.
Fourthly, the inquiry processes are sometimes slow, intimidating and inefficient not just because of different regimes, different systems and different rules, but also because of an overdependence on cross-examination as the only way to test evidence. Sometimes loud voices are the only ones that are heard.
Fifthly, further delays are introduced where, as is frequently the case, more than one Minister is involved in taking the final decision. These decisions, contrary to what is popularly believed, are not open to challenge in Parliament; they are not accountable directly to a constituency; and they can only be overturned in the courts. They are quasi-judicial decisions.
This complexity means that our planning system breeds delay and acts as a deterrent to necessary applications coming forward when, as the Royal Town Planning Institute says, our competitors are looking to develop streamlined, fast and effective systems. These delays do not, perhaps, prevent those with the most resources having their say, but they make it incredibly hard for those poor in time and expertise to participate.
The result is that we have struggled for years with a system more akin to Jarndyce and Jarndyce than one fit for a modern economy. The system puts the difficult decisions off until the last stage; it forces inquiries to spend enormous amounts of time debating what government policy is, and whether there is a need for infrastructure. The result is costly and there is uncertainty for communities as well as for developers.
We have to deal with this deep structural fault in the system. While there have been plenty of attempts to improve the system through incremental change, it is not surprising that they have brought only limited relief. I hope on that basis that it is clear that this Bill is not just about speeding up the planning system; it is not about making life more comfortable for business; it is about clarifying the different stages of the process of policy-making and planning, clarifying the role of Ministers, and creating a new, more coherent, more effective and more productive process on which we can build our economy and society for the future.
Rather than work chronologically through the Bill, it will be more useful if I talk about how it addresses those failures. First, the Bill identifies for the first time a range of nationally significant infrastructure projects that are so vital to the national interest that there must be a separate process for dealing with them; they are defined in detail in Part 3. Those thresholds have been chosen so as to preserve the devolution settlement: where decisions on infrastructure have been devolved to Welsh or Scottish Ministers, this continues to be the case.
Secondly, the Bill clarifies national policy and separates out the policy-making process from the planning process. The Government will, under Part 2, set out a series of national policy statements to the public and to Parliament for consultation and challenge, explaining the need for infrastructure, principles and criteria which will indicate, in some cases, possible locations. These national policy statements will be planning documents of the highest order. National policy statements themselves will reflect existing policies and priorities where relevant, such as the protection of habitats or heritage. They will provide a clear framework for promoters to take investment decisions.
The separation of policy-making from process and the creation of a single process for planning determination is resolved by the creation of an Infrastructure Planning Commission—the IPC—with the task of deciding whether or not individual projects should go ahead. It will consist of experts in a range of fields, including community engagement, planning, local government and the environment. The IPC will work within a clear framework of legal duties set by Parliament and policy set out in national policy statements by Ministers. We anticipate that it will deal with about 45 major infrastructure applications per year and a larger number of smaller projects, such as work on the electricity transmission network. Where no NPS is available, Ministers will continue to take decisions.
Thirdly, the fundamental problem of overlapping consent regimes is resolved in Part 4, which replaces the cat's cradle of overlapping consents with a simplified consent regime. It sets out that projects classed as nationally significant infrastructure will henceforth require an order granting development consent under this Bill. It disapplies the need for such projects to seek consents under eight other regimes.
Fourthly, the problem of the lack of preparation and poor consultation that dogs the presentation and understanding of development applications, and which leaves communities confused and often alienated, will be resolved by Part 5. The Bill creates not only a clear requirement that all applications must abide by national policy as set out in NPSs, but a new—mark this; it is important—pre-application process that will require developers to consult with the local community, to have regard to what they say and to show that they have done so. Before accepting any application, the Infrastructure Planning Commission will have to make sure that those tests have been met. In deciding this, it will have to have regard to any report by the relevant local council on the adequacy of consultation.
Fifthly, the inquiry processes, particularly the examination processes, will be streamlined. Under Part 6, a body of independent commissioners with expertise in a wide range of fields will examine applications and, crucially, test the evidence themselves. For the first time, every part of the process—from application to final decision—will be carried out transparently by a single body, according to clear procedural rules.
The new system will have three main phases: policy; project development; and the consideration of the application. Central to better decision-making will be the national policy statements and what they signify. This is the first stage of a new way of doing things. Ministers will, for the first time, have to set out an explicit case for the national need for relevant types of infrastructure and policy regarding how such infrastructure should be developed. The NPS will undergo an appraisal of sustainability integrating all economic, social and environmental aspects of policy. These are not White Papers. They will be, in effect, more like planning policy statements that will set the primary policy framework for the planning decisions to be taken by the IPC.
This is new territory, and it will not be to the comfort of Ministers. For the first time, they will be making difficult decisions explicit, not behind doors in Whitehall. Parliament will, for the first time, see the full and complex picture of ministerial policy in planning matters. Individuals and local authorities will be able to have their say on how the assumptions and difficult choices made at national level could have implications in their local areas.
We recognise that some forms of development—particularly nuclear power stations and aviation and airport projects—can be extremely controversial. In particular, there can be real debate about where that development should go. We have therefore said that we will set out explicitly in the nuclear and aviation NPSs the locations that we think are suitable for development. This will mean that Ministers, through the NPS, will be doing much more of the heavy lifting in the process. Parliament will have much greater influence over this crucial question. The IPC will be looking at a particular application, examining the more technical questions, assessing the adverse impacts of a particular proposal and looking at the benefits, costs and mitigation measures. We will ensure that where the draft NPS is locationally specific, local peoples' views are taken fully into account in the final NPS.
We anticipate that we will bring forward about a dozen national policy statements to cover energy, transport, water and waste. Significantly—I know that noble Lords are profoundly interested in this—national infrastructure policy in NPSs will be tested, for the first time, not only in an effective consultation process but subject to parliamentary scrutiny. Ministers have agreed a process whereby the relevant Select Committees of the other place would consider draft NPSs and the results of public consultation. Where the Select Committee recommended that issues in the NPS demand further parliamentary debate, the Government have committed to make time in both Houses for such a debate. The Secretary of State would not formally designate an NPS until he or she published a revised draft and laid a Statement before Parliament explaining how account had been taken of any resolutions made by either House.
I stress that we have listened hard and responded to critics of the Bill on sustainability, parliamentary scrutiny, public participation, and accountability. Sustainability is the key imperative guiding the Bill. It is about sustaining resources as well as jobs and incomes. We have been clear about the duty of sustainability; it is set out in Clause 10 and places Ministers under a sustainable development duty in relation to all NPSs. The new regime will also be subject to the provisions of the Climate Change Bill, which imposes a general duty on Ministers to meet carbon budgets and to publish proposals and policies for meeting them. Ministers will have to explain precisely how national demand is to be managed in the light of environmental and social concerns.
Furthermore, the process will allow not one opportunity at the final planning stage for people to be involved in decisions which affect them, but three opportunities at three critical stages. First, we want there to be a proper national debate about the need for key infrastructure, as I have explained. Secondly, the pre-application provisions are entirely new. Developers will have to consult with local communities before even submitting an application. Thirdly, the IPC process itself has been deliberately designed to boost opportunities for public participation; to make it easier for all interested parties to get their points of view across. The IPC will take evidence in the first instance via written representations and will test both written and oral evidence by means of direct questioning, not least because much of the evidence is technical but, additionally, so that members of the public can have direct access to the IPC. The IPC will have to hold an "open floor" oral hearing whenever an interested party requests one; and any interested party would have a right to be heard at this point. The IPC would also hold oral hearings whenever it felt this was necessary to examine specific issues.
As I have said, in most circumstances the IPC will test evidence itself through direct questioning, rather than relying on cross-examination, because we recognise that a legalistic and adversarial approach creates barriers. How many people or groups give up at the gate of a public inquiry because they cannot afford the legal fees?
Finally, on ministerial accountability, the House will recognise that Ministers' decisions are quasi-judicial, not political. They are open to challenge in a court of law rather than by parliamentary process. In the Bill, we are setting up a more accountable process. Decisions must be made in accordance with stated ministerial policy as scrutinised by Parliament and the public, unless the adverse impacts of a particular proposal outweigh the benefits, or to approve it would be against the law.
We have constructed not only a coherent process but an accountable one, which makes it clear that Ministers make and are accountable for policy, and the planning decision can appropriately be left to an independent body bound by that policy. Indeed, because there is an element of judge and jury in their own cause, we do not think that Ministers should be involved. We have constructed a process which will, critically, lead to better and faster decisions on projects which by their nature are complex and technically difficult.
We have also built in additional safeguards. Noble Lords should note that where a national policy statement is not available or is out of date, the IPC will recommend a course of action to the Secretary of State, who will continue to take final decisions. The Secretary of State also has an essential power to intervene in a case where the national policy statement requires revision or where national security interests arise. As noble Lords will know, we have committed to review the process two years after the establishment of the IPC, to verify that it is working well.
Part 9 sets out a series of measures aiming to declutter the applications system in the wider town and country planning system. They are just a part of a widespread continuing improvement to the planning system we set out in the White Paper and which we are implementing through secondary legislation and administrative changes. This part of the Bill also has an enabling provision to allow regional planning bodies to delegate some of their planning functions by agreement to regional development agencies. This is not like the transfer of powers from regional assemblies to RDAs—that will require new primary legislation. These reforms build on the more radical package of changes to the planning system introduced through the Planning and Compulsory Purchase Act 2004.
Part 9 also contains provision to set up local member review bodies to determine certain planning appeals instead of the Secretary of State as now. We have listened carefully to stakeholder views on this provision and concluded that, while it may bring some benefit, it risks distracting local authorities, particularly at a time when there is an urgent need for them to focus on strategic plans and issues. We therefore intend to drop this provision at Committee stage.
Part 11 gives powers to the Secretary of State to establish a community infrastructure levy or CIL by regulations. In order to deliver new housing and economic growth in a sustainable way, it is vitally important to put in place appropriate levels of infrastructure. It is right and fair that local communities should benefit more in this way from the uplifts in land value arising from planning permission to finance the infrastructure needed to support growth. CIL represents a way for local authorities to levy a charge on new developments to contribute to the financing of infrastructure needed to support that growth. Local authorities can choose whether to establish a CIL in their area.
CIL would take the form of standard charges, such as so many pounds per residential unit or per metre squared of floor space, and would be based on a costed assessment of the local infrastructure requirements needed to support the development planned by the local planning authority. The LPA's proposed level of CIL will be subject to testing and consultation with developers and the local community to ensure that it is set at levels which do not make development unviable. The need to ensure that CIL facilitates development rather than frustrates it is of utmost importance.
CIL gives the property and development industry increased certainty about the amount developers will be asked to contribute during what we recognise is a period of uncertainty. It offers greater predictability and transparency over the current system of planning obligations. This will help to inform land deals.
CIL will also increase fairness by broadening the range of developments contributing to infrastructure. It will help better to address the cumulative impact of small developments, which currently contribute relatively little towards the infrastructure needs they create. We intend that almost all new residential and commercial developments will be liable to pay the community infrastructure levy subject to de minimis thresholds which will exclude householder development by homeowners.
We are clear that there may be a case for exemptions from the need to pay CIL and some noble Lords have already been involved in discussions with the department regarding the position of charities. We are actively working with the charity sector to understand its concerns and how any exemptions from CIL should be formulated to be fair, objective and lawful. We are also working closely with housing stakeholders to work through their concerns regarding affordable housing.
Noble Lords will be aware that the proposals for CIL are being taken forward by the Government in preference to previous proposals for a planning gain supplement. CIL proposals have been broadly welcomed by the property industry and local government. Indeed, the Opposition have said that "the levy is acceptable". Therefore, we believe that we have a broad consensus that CIL is the right way forward.
It will not have escaped noble Lords' notice that the Bill's powers are broad in nature to give flexibility over time, to reflect lessons learnt from the application of CIL in practice and to permit different arrangements in different areas. I am aware that the Delegated Powers and Regulatory Reform Committee has recently given its opinion on the clauses which we are considering and will return to in due course.
We will continue to test details of the regime with key stakeholders and we intend to engage in a full consultation exercise on the CIL regulations. We will shortly publish a document on the levy, which will set out in greater detail how it is envisaged that it will operate, and will, I hope, aid noble Lords in their consideration of these clauses when we discuss them in Committee.
The Bill provides a very welcome reform of the planning system which will hugely benefit our communities and our economy. The new process for planning for major infrastructure must be one which builds on the best expertise and judgments of politicians, people, parliamentarians, developers and experts. The Bill represents a new approach to decision-making, to partnership in government and development, to the place and accountability of Ministers, and to the way planning decisions are made and accounted for to the people most affected by those decisions. I commend it to the House.
Moved, That the Bill be now read a second time.—(Baroness Andrews.)