My Lords, I congratulate all noble Lords who have spoken in the debate. It has been outstanding. I quite agree with the noble Lord, Lord Greaves, who said that far from it being the worst Second Reading, it has been one of the best Second Readings I have attended. I am not that biased because it has been a challenge for me as well. I have learnt a great deal from the collective wisdom of the House this evening and I am also grateful for the stamina and the support displayed by noble Lords.
I shall try not to take too much time. I probably will not be able to answer all the detailed questions. Like other noble Lords including the noble Earl, Lord Cathcart, I shall concentrate on a few of the bigger issues. Much advice has been offered to the Government this evening. There has been some very refreshing common sense from my noble friends and some extremely strong key arguments have emerged. Of course I shall engage with noble Lords in detail. I shall be in touch and we shall meet and exchange letters over the next few weeks and months.
I do not believe, as the noble Baroness, Lady Hamwee, said, that we have two sides to this argument, for the same reason that I do not believe that there is necessarily a conflict between a prosperous society and a sustainable economy and society. Like the noble Lord, Lord Greaves, I think we are about a sustainable society and economy, and the Bill helps us towards that. Many values as well as arguments are shared by the business community and the environmental lobby. One of our tasks is to make sure that those two lobbies talk to each other in the course of the next few months.
It is true that the present planning system has very few friends across the Floor. I was grateful to my noble friend Lord Woolmer for challenging the parties opposite to suggest what they might put in the place of what we have brought forward. I am pleased that there is a broad consensus across the House for what the Bill is designed to do. I am also grateful to my noble friends for the way in which they have graphically described the catastrophic failure of the present system. I am thinking of the contribution made by noble Lord, Lord Dixon-Smith, who said that there is no case against reform. The noble Lord, Lord Hart, gave a graphic description of court procedures and the difficulties they impose, as did the noble and learned Lord, Lord Boyd, who has great experience.
The noble Lord, Lord Cameron, described particular instances of how the system has failed to deliver over the years. The noble Baroness, Lady Valentine, spoke of the imperatives that London alone faces. My noble friend Lord Rosser described the strains that the system imposes. Other noble Lords spoke of the need to meet the challenges of energy, water and so on, as well as security, and the risk of not getting that right. I was very grateful for the expertise of the noble Lords, Lord Best and Lord Mogg, who said that the planning system is the single greatest obstacle to getting the energy mix we want for the future. The noble Lord, Lord Oxburgh, talked about how the system is incapable of meeting the situation that we face. My noble friend Lord O'Neill spoke graphically and powerfully of the implications of our present system. They were strong arguments indeed, and I thought we were all listening, quite transfixed, to some of them.
At the same time, other noble Lords marked up their reservations and focused essentially on issues such as sustainability and climate change, the role of NPSs and parliamentary scrutiny, ministerial accountability and the Infrastructure Planning Commission. They also spoke about a number of different, separate issues that I will try to come to, but if I run out of time, I hope noble Lords will forgive me if I write to them on those points.
I turn first to climate change and sustainability because they are at the heart of the Bill. It was substantially changed in another place as we strengthened the sustainability duty. However, I listened carefully to what was said by the right reverend Prelate the Bishop of Liverpool, the noble Baroness, Lady Miller of Chilthorne Domer, and my noble friend Lord Judd about the implications of, and the relationships with, climate change in the Bill. Climate change will be a prime consideration in the drawing up of the NPSs. The planning White Paper included a policy commitment to consider climate change when national policy statements are being developed. We have delivered this by requiring an appraisal of sustainability for every NPS. Climate change would be considered as part of that wherever relevant. 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 polices for meeting them. As many noble Lords know, the Bill places duties on the Government to tackle the issue of climate change at this level.
I do not believe that there is a need to place a specific duty on the Secretary of State in this respect. I will have to write to the noble Lord about the European lawyers; I do not think they are quite correct, but I will make sure. For example, where the EU strategic environmental assessment directive applies, we will carry out an appraisal of sustainability that will cover all obligations under the directive. Where it does not apply, a robust assessment framework will apply to all statements to ensure that environmental, social and economic objectives are properly factored in to their development. Government departments are working on that now. Very important points were raised by noble Lords this evening, and I will now look closely at the detail of the Climate Change Bill and at how it will work alongside the provisions of the Planning Bill.
On the habitats directive, I say to the noble Baroness, Lady Hamwee, that yes, the IPC will have to meet the obligations of the habitats and birds directives. That includes the appropriate assessment of plans and projects likely to have a significant effect on the European sites and the consideration of protected species.
Noble Lords welcomed the simplification of consent regimes, the separation of policy from planning, the NPSs and the role of Ministers in making and being seen to make policy on the NPSs, parliamentary scrutiny, and the improvement of processes—speeding them up. I think there was probably a majority in favour of the IPC as well. As the noble Lord, Lord Jenkin, said in a powerful speech, we are offering a seamless package. We have built accountability into the front end of the process, exposed the Minister in an uncomfortable way for the first time, in order that we can safely have an Independent Planning Commission doing the right job. I will come to that in a moment.
On the questions raised about the NPSs and their status—for example, the question about where they fit into the planning statement—there is a statutory requirement for regional planning bodies and local planning authorities to have regard to national policies and guidance when preparing development plans. Once a national policy statement is designated, the relevant development plans, including spatial strategies and local development frameworks, should be consistent with it. NPSs could then influence local decisions.
I am sorry that the noble Earl, Lord Caithness, is not in his place, because I can assure him that we are expecting the first of the NPSs by the middle or end of next year. It will probably be the one that deals with overarching energy policy. Some flood defences will be included—for instance, dams and barrages that generate electricity or ensure adequate drinking water—but the impact issues about sea walls remain primarily of interest to the region and the surrounding local area, so local authorities are best placed to make those decisions. I think that that takes care of a point raised by the noble Baroness, Lady Miller.
On NPSs, my noble friend Lord Judd raised the question of the air transport White Paper. I assure him that before a pre-existing policy statement was designated as an NPS, Ministers would have to ensure that the standards of consultation and appraisal set out in the Bill had been met. We are already committed to producing a further progress report on the air transport White Paper between 2009 and 2011, which will provide a good opportunity to designate the ATWP in conjunction with that report. I hope that that answers that question.
Many things have been said about the democratic process. I described the three new opportunities for people to speak up and be heard on how the process will affect them. In our engagement with environmental groups, we have challenged them to tell us how we could improve the consultation processes on NPSs in future. I confess that I was a bit depressed to hear noble Lords say that they thought that the pre-application process might be hijacked by developers. My noble friend Lord Woolmer addressed that point.
If noble Lords studied the Bill, they would see that throughout it is clear that local authorities have the key role on advising the promoter how to conduct the consultation and advising the IPC as to whether the promoter has carried out the consultation. The developer can get advice from the IPC. All that is about a better process and the referee role of the local authority. As regards the commission, I do not understand how the process can be described as undemocratic, when I listed so many different opportunities for people to engage and to be heard throughout the process.
We had some graphic illustrations, not least from my noble friend Lord Hart and the noble and learned Lord, Lord Boyd, of the failure of cross-examination and how it does not dig out the true nature of some of the evidence available. The answer to the question raised by the noble Baroness, Lady Gardner, is that the open-floor hearing can be triggered by anyone who has an interest. I feel sure that we will return to those issues in some detail at Committee.
I see this as a genuinely challenging process, and I am grateful to my noble friend Lord Haskel for his remarks about how adversarial it is. I can tell him that we are keen to increase planning aid. We are putting it up to £3.2 million in 2008-09, and will make further increases in later years, because we want people to have the resources and the access to information so that they can have the confidence to challenge what they are being told. That is absolutely vital. The same is true of the resources for the IPC to do the job that it needs to do, so I hope I can reassure my noble friend Lord Hart on that point.
The noble Lord, Lord Reay, asked about the culture of the IPC, how it will operate and exercise its independence, and how valuable that will be. The noble Lord, Lord Mogg, answered that it will be objective and expert. It will make its own judgments. The noble Lord, Lord Cameron, said that it would be democratic. The answer to the question whether it will be some straw man or collection that will simply rubber-stamp is no. This body can say no. It is independent. Yes, it will be bound for the first time by national policy statements, which the Minister will be accountable for, but this is an independent commission that will make judgments bearing in mind local impacts as well as the overarching policy.
That takes us to the sorts of issues that have exercised noble Lords this evening, such as the parliamentary process and the scrutiny that is on offer. The noble Lord, Lord Lucas, made a powerful case for further scrutiny, as did the noble Lord, Lord Jenkin. However, I must say to the noble Lords, Lord Burnett, Lord Cameron and Lord Oxburgh, and to the noble Earl, Lord Cathcart, when he wound up his remarks, that we have always maintained in this country that there is a definite separation, which is that Ministers have responsibility for making policy and Parliament has responsibility for scrutinising legislation.
For the first time, we have provided for the voices and views of both Houses of Parliament on policies that will have great national significance to be heard and taken account of by the Government when they reflect on the expertise of the Select Committee and both Houses of Parliament and what they say. It is absolutely right that Parliament should have a voice about policy. Indeed, that is its proper function. However, requiring parliamentary approval of national policy statements, rather than ministerial accountability for them, would create an entirely different proposition and take us into unknown territory.
In another place, my right honourable friend said:
"Given that the policy statements are policy documents, they are closer to planning policy statements ... which are not subject to parliamentary approval, than to legislation ... I do not see a ready-made model or suitable precedent for a binding vote on such statements of policy. Unlike with legislation, we could be taken into unprecedented and problematic territory if the two Houses were to take a different view of the policy that might be contained in a national policy statement".—[Hansard, Commons, 2/6/08; col. 574.]
That might not happen, but we must consider the implications of that possibility, however remote it might be. As I have said, the Bill provides for the interests of both Houses to be recognised and for the Secretary of State to respond and reflect them in a formal statement.
The noble Lords, Lord Lucas and Lord Cameron, argued that there should be an opportunity for the expertise of this House, too, to be brought to bear on the process. I would be the last person to deny the expertise of this House, particularly after having listened to this debate. I hear what noble Lords say about the need for some form of additional scrutiny. We will reflect on what they have said. It will also be a matter for the authorities of this House.
Briefly, noble Lords have challenged the notion that ministerial accountability is sufficient. I was quite surprised to hear the noble Lord, Lord Burnett, say that this was a form of Ministers passing the buck. I can think of nothing more remote than a Minister in the front of that process having to defend policies against challenge. The buck will most clearly be seen to stop with the Minister.
The end of the process that we have created leads to an open and democratic scrutiny and expert testing. The problem with reintroducing the Minister, as I think one of my noble friends said, is what could he do? He could not revisit the entire evidence as set out in extraordinary detail by the IPC. Could he merely confirm what the IPC has done? What would be the accountability? If we are to have these debates in Committee, we need to think through the implications of what we would be asking Ministers to do.
I shall finish with a few remarks on CIL and on Wales. I listened very closely to what the noble Lord, Lord Goodhart, said about CIL. I have nothing to add to what I said in my introduction. The regulations will be very complex and detailed. They will need great care, which is one reason why we did not put the detail in the Bill. I have listened to noble Lords, not least my noble friend Lord Woolmer. I can say to the noble Baroness, Lady Gardner of Parkes, that CIL is discretionary. Local authorities will have a choice. It will be local and will sit alongside Section 106. A negotiated planning obligations regime will remain in place and will provide further assurance on that point. Clause 209 repeals the provisions in the Planning and Compulsory Purchase Act 2004, which, if it had commenced, would have been used to repeal Section 106.
I have listened very closely to the important points raised by the right reverend Prelate the Bishop of Southwell and Nottingham on the implications for charities and, likewise, the arguments on affordable housing. We have met already and will go on meeting with those bodies which are concerned. We will listen closely and think about what we can do. I take the point made by both noble Lords on that.
Finally, my noble friends Lady Whitaker, Lord Judd and Lord Howarth, and the noble Baroness, Lady Miller, powerfully addressed design. We are supporting good design in planning through funding, training and capacity building. National policy statements will be the primary reference points for the IPC when taking decisions on national statements. We will try to integrate all relevant aspects of policy, including policy or design together, and we will have a lively debate on how best we can improve on that process.
I was asked why the RDAs should not do planning. We see benefit in aligning economic and spatial planning led by the RDAs in partnership with local authorities. Our proposals are designed to achieve a better balance between the two. But we are out to consultation and there is certainly time for debate on that.
On Wales, planning is of course a devolved matter. There are some reserved issues on energy. The noble Lord made some very important points. National policy statements would be the primary policy consideration for the commission, but in taking decisions the commission would have discretion to take account of all information which it considers relevant and important to the case, including applications relating to Wales, evidence from the Wales Spatial Plan, the local development plan and planning guidance. I should like to meet noble Lords who have an interest in Wales as soon as possible so that we can make sure we understand the full implications of what is in train for these energy applications in particular and for cross-border issues, which are complex.
I feel sure that I have run out of time. I have not addressed thresholds, the green belt and so on, but I will write to noble Lords. It has been an excellent debate. It is a rather terrifying prospect that we will go into the Committee stage with all that and more to come, and have detailed engagement. I am sure that when we do we will be refreshed after the summer. I look forward to it. I am most grateful to noble Lords.
On Question, Bill read a second time, and committed to a Committee of the Whole House.