My Lords, I apologise for bringing new material before the House at this stage of the Bill, though I did give notice that I might do so at the previous stage. This Bill has been scheduled in a way that could not be more difficult for me. I declare an interest as the leader of a London borough and this evening is our annual budget council meeting, which begins at 7 pm. Looking at the clock, this will probably be the first council meeting in 20 years on the Front Bench for which I have been late—I hope I will not miss it, as I hope your Lordships are not that prolix. But it is a testimony to the importance that I feel this matter deserves.
This is something that came up during the passage of the Housing and Planning Act last Session and I argued the point at some length. Ultimately it was stated that it was a red line for the then Chancellor of the Exchequer. I felt that his red lines were around trying to ensure it was possible to oust small businesses in the suburbs of London and that, had he found his red lines somewhere else, perhaps history might have evolved differently. But that is the past. I have since found, having been given some indication that there would be a readiness to discuss this matter, a willingness to discuss it, personified by my noble friend on the Front Bench. This is entirely distinct from the attitude that I encountered not so long ago and I am enormously grateful for that. I underline everything that so many noble Lords have said in the passage of the Bill about the open and thoughtful conduct of my noble friends on the Front Bench and indeed of Ministers. I met the Minister, Mr Barwell, this morning and I found the same open response there.
In a nutshell, this long amendment is about trying to close off some of the issues that were raised with me on the previous occasion. Under the system that was introduced in May 2013, permitted development rights allow office floor space—classified B1 in the technicalities —to be converted to residential space without planning permission. In some areas of the country that is fine. Indeed, these changes have made a great contribution to housing development, including in my own borough, where no one has an interest in defending redundant office space. At no stage have I wished to strike down the willingness of local authorities to go along with that power and use it.
The problem is that in some areas, including my own authority of Richmond, which is a conspicuous example, the difference in value between office property—or, for instance, a stables in my ward that has been affected—and residential property is so great, at 3:1 or 4:1, that the policy has acted as a magnet for unscrupulous developers. I have even traced one or two with offshore designations. They come in, buy properties, and begin to expel working businesses. As a Conservative, this is absolutely contrary to everything I believe in and to what our party stands for—aspiring for people who work hard. Indeed, how often do we hear such things from all Benches in this House?
It is wrong that, to make profits for somebody else who has no interest in the community, offices and business premises can be closed. This should at least be subject to local determination. I do not wish to trouble the House at too great a length, as that would repeat some of what I said last year. But in Richmond, up to last autumn, we had 251 of these so-called prior approvals and we have lost more than 30% of our overall floor space. In more than half of the cases, the offices subject to prior approval were, in the jargon, either fully or partly occupied. That meant someone was trying to make a living or was employed there. The owner saw an opportunity to make a profit on this arbitrage between the two classes and pushed somebody out. I think that is wrong, as do all of us in local authorities and local government. There was a wonderful malapropism from my noble friend earlier when he said that the “interesting” parties would be consulted. I am not sure that most people find local government very interesting but we are certainly interested.
We come across many personal cases of people who are homeless, terribly sick, suffering from dementia or in poverty, but one of the most difficult things I have found has been having to explain the situation to constituents—in one case, the grandson of somebody who founded a business in the premises from which they were being ousted so that a developer could make a profit. Therefore, I have put forward some proposals for how this might be addressed, although I make no claim that my solution is necessarily the best one. I look forward with interest to hearing what my noble friend on the Front Bench has to say.
Article 4, which is often proposed as a solution, is not perfect. It is too slow. In the case of prior approval, the new buildings make no contribution to infrastructure —schools, transport or health—and are not required to meet space standards. There is no consideration of loss of business rates or council tax income and so on, and under Article 4 planning fees do not come to the local authority. The current provisions of Article 4 do not allow a planning authority to demand a fee for associated planning applications, so even the standard approval application charge of £80 is lost. Of greater concern is the loss of the planning application fee.
In my borough, according to the figures that I have been given, the 251 prior applications determined would previously have generated fees of in excess of £400,000 but rendered just £20,000 for the borough under the prior approval process. There is a massive gain for the arbitragers and a massive loss for the local authority. A much sharper process will have to be introduced swiftly into Article 4 if we are to address this matter. The problem shifts because the arbitragers move very fast from one place to another, so at the very least some reform is needed.
I also hope the Government will think again about extending the proposals—certainly in areas such as mine, which are already badly affected—to allow demolition and replacement without planning permission. Instead of going in the direction of amelioration, this is going in the wrong direction.
In my amendment, I have tried to accept two points that were legitimately put to me by the Government: first, that a local authority should be able to show that it is conforming with its housing duties and meeting its housing targets; and, secondly, that at some point the Government must have a stopping power if a local authority behaves unreasonably or if it can be shown that a local authority has no reason, in terms of lost employment or threat to the economy, to act. Again, I am not sure whether my formulation is right, but I hope that if my noble friend on the Front Bench—I anticipate that he might give me some hope—cannot accept that this is the way forward today, he will be prepared for there to be further considerations and discussions on this matter. I believe that that is the spirit that I am finding in the Government, but I beg him to understand that, in the spirit of localism, something which may be a boon in other parts of the country is a bane in ours. I hope we will find a way forward to resolve what I believe, in terms of the eviction of businesses, is a social evil.