Lord Gascoigne:

Moved by Lord Gascoigne

245: Clause 55, page 92, line 7, at end insert—“(c) comply with the principles of the mitigation hierarchy.”

My Lords, I am delighted to kick-start this group, not least after the great discussion we just had on the previous group. Equally, I am delighted and honoured to have the support of the noble Baronesses, Lady Young of Old Scone and Lady Parminter, for my Amendment.

Amendment 245, which is in my name, seeks to specifically set out the importance of the mitigation hierarchy, which has reared its head on various occasions throughout the entire passage of the Bill. Most should already know what that means but, in short, it is the well-established common principle in development that there are a series of steps to go through on a site when it comes to the environment. These are: first, to avoid, then to minimise, then to restore, and then to offset.

As we just touched on, the problem with EDPs in this Bill is that we simply fast-track to compensation. In effect, developers can ignore the first three stages and pay into some pot to offset whatever it is they are doing. Here, the only obligation is the payment; your role is then done. I am not normally like this, but that is a pretty dystopian view. I know that, with many, that will not happen, and some will seek to follow those steps when working on development, even if the law does not stipulate it, but that would not be enforced and would be down to good will.

Amendment 245 would fix that and insert the mitigation hierarchy as part of the EDP’s conservation measures. Indeed, my amendment would be inserted into the subsection that explicitly states:

“An EDP must set out the measures (‘conservation measures’) that are to be taken by, or on behalf of, Natural England, under the EDP”.

It may be argued that it is not needed because of the mitigation hierarchy. The Minister is not in her place, but she was just saying at the Dispatch Box that the mitigation hierarchy is already implicit and that it is common practice. I have the highest regard for the Minister, who I assume will be responding, and I am sure she will say at the end of this debate that, while the Government support the principle and the arguments behind what I am seeking to do, it is not needed because it is in the NPPF. However, if it is not explicit in the Bill, it leaves the door open to regression legally.

I know that some see the NPPF more as planning guidance than law, and that the NPPF is general rather than specific. An EDP is entirely novel, hence why we are rightly having this huge debate; it creates a new regime and, as a result, it is not in the NPPF yet. Despite what the Minister just said, as it is new, it is right that it should feature in the Bill because it is creating a whole new aspect of planning law. It would ensure that the Bill and the NPPF align coherently. That should be explicit in the Bill.

It is not just me who thinks that the mitigation hierarchy should feature; in the previous group, the Government set out some amendments themselves. If you look at the guidance when these amendments were set out, the Government said:

“These changes underline the continued role for the mitigation hierarchy in the design of EDPs, ensuring that local conservation measures are preferred unless there is a clearly articulated environmental basis to look further afield”.

I think that is pretty much what the Minister said in concluding the previous group so, when those amendments came down, I was relieved. As I said on the previous group, I am grateful that the Government have put some amendments down. When I kept hearing that the mitigation hierarchy is going to be maintained, I thought that that was great; it is a good step. However, when I look at the list of amendments that we are debating in this group, I am afraid that I cannot find exactly where the Government say that the mitigation hierarchy will take place. This amendment seeks to fix that and to put in what the Government say they support.

It feels like we were debating this only yesterday. It was literally yesterday, at 1 am, when we were talking specifically about species. It may well be that, even if there are no species to be protected on a site, we can all agree that it is right that any development seeks to minimise and avoid as much damage as possible. That in itself is conservation.

There are a number of similar amendments in this group from other noble Lords, all of which seek to address the same issue of putting specific references in, and I support them, especially Amendment 301 in the name of the noble Baroness, Lady Willis of Summertown, to which I have added my name. It seeks to ensure that the mitigation hierarchy applies, while allowing flexibility for Natural England. If we take the group as a whole, these amendments do not stop the EDP process and they are not political games, certainly not from me. It does what the Government say they support. I hope that it will feature at some stage as the result of these conversations, because it is not in the Bill at the minute. I hope that the Minister recognises that this improves what the Government seek and makes the EDP a win-win for nature and development. I beg to move.

My Lords, I thank the noble Baronesses, Lady Parminter and Lady Willis, for supporting Amendment 256ZA which I have tabled. I support Amendment 245 in the name of the noble Lord, Lord Gascoigne. His eloquent promotion of it means that I do not need to explain what the mitigation hierarchy is all about. However, it is an important principle in conservation, and it has come to the fore in the biodiversity net gain policy. In the case of this Bill, it would require a developer or Natural England preparing an EDP to look first at how to avoid damage to natural features, or, if avoidance of damage is not possible, to mitigate—that is, reduce—the impact, or, as a last resort only, to provide compensation habitat for the damage.

Under the draft Bill, Natural England could be, subtly or otherwise, pressurised into writing an EDP that jumps straight to damage and compensation. That might be the lowest-cost option and therefore to be desired by developers and also perhaps by the Government in pursuit of growth, even where it would have been feasible for Natural England or a developer to implement measures to safeguard the original protected habitat. I know that the Minister does not like the Bill’s nickname of “cash to trash” but, if it is not to be portrayed in that way, I believe that it will need to be amended to encourage developers and Natural England to comply with the mitigation hierarchy.

In responding to the previous group, as has been said, the Minister—the noble Baroness, Lady Taylor—referred to the mitigation hierarchy, but also said that a change of direction is needed to achieve more effective conservation action, perhaps distant from the site of an existing environmental feature. I have heard it said before that we need a change of direction or change of heart in our approach to conservation, if we are going to reverse the decline of species in habitats, and that strategic landscape-scale action is what is required, as recommended by Sir John Lawton in his report: bigger sites, better sites and more joined-up sites.

But Lawton did not actually see these as an alternative to in-site conservation; he saw them as an addition to that. I think it is true that existing protected habitats are almost always more valuable than newly created habitats, so I hope that we can find a middle course that allows these landscape-scale strategic sites to be developed but does not, in the process, unnecessarily—if it can be otherwise—damage environmental features that could be maintained and protected under the mitigation hierarchy.

I am sure that the mitigation hierarchy, as it has been subject to a large number of amendments already, will be an issue that we return to on Report. It would be useful if the Minister could give the Committee some assurances about the position that she sees for the mitigation hierarchy and the Bill as currently formulated.

My Lords, I will speak to my two amendments in this group on the mitigation hierarchy—Amendments 251 and 275. I do not want to speak too long on this, in the interests of the Committee, but I think that this and the last group are the two key issues remaining in the Bill. To my mind, the Government have not made enough of a solid argument for removing the mitigation hierarchy system—a tried and tested system that works and can be relied upon. No doubt there are inherent risks with changing this new system, even with the best will in the world. Similar to the last group, I generally support all of the amendments in this group and I welcome them. However, despite the reassurances given by Ministers, there is still an air of concern around these issues across the Committee.

To my mind, the Government have not made the required level of argument as to why they need to remove the mitigation hierarchy. I want to look at that specifically in relation to housing, because—and I raised this in relation to the stand part group we had the other night—all the energy policy statements have recently been updated. The Overarching National Policy Statement for Energy—EN-1—has been updated and we have had new policies on renewables, new policies on the grid and new policies on nuclear under this Government. They all have the mitigation hierarchy at their core, and they are actually really good, solid documents. So, if this Government are able to deliver the energy transition with the mitigation hierarchy in place, why can the same Government not deliver new housing with it? It just does not make sense to me. That is something I will leave to be discussed.

My Amendment 251 seeks to ensure that Natural England accepts requests only when developers have properly applied the mitigation hierarchy and justifies projects due to there being no alternative solutions and no incorporated public interest grounds, especially for sensitive habitats. We believe that this basic safeguard is needed to embed our core principles of environmental protection in planning into the Bill.

My Amendment 275 seeks to intervene in Clause 58 of the Bill and is designed to inject rigour, accountability and genuine environmental protection into the heart of the new planning system. I am pleased that this amendment has the backing of the Wildlife Trusts. It mandates that Natural England, as a delivery body, must not only adhere to the mitigation hierarchy but demonstrate that any EDP will result in significant environmental improvement

“at an ecologically appropriate scale”.

Those words are important. Other Members have raised issues about the mitigation hierarchy. I recognise the commitments the Government have made, but I think there is still a need for reassurance on these matters.

My Lords, I have been pleased to sign a number of amendments in this group, because the issue of the mitigation hierarchy is a big outstanding area of concern for those of us who want EDPs to be part of packages in the future but are concerned about it. The noble Baroness, Lady Young, and the noble Lord, Lord Gascoigne, have made the case, as has my noble friend Lord Russell, for our concern that the mitigation hierarchy does not remain for EDPs but does for other planning obligations.

I have one question for the Minister. Both Ministers provided a letter today that said that,

“an EDP can include planning conditions to avoid or reduce impacts on the site … before they can access the benefits of an EDP”.

I can see that that is an attempt to soften concerns that the mitigation hierarchy does not apply for an EDP, but I think the Committee needs quite a bit more information in the Minister’s summing up, and certainly before Report, about what exactly that means. I note that the letter says that an EDP “can”, not that an EDP “must”. I do not see how it is going to work.

The helpful chart drawn up by the noble Baroness, Lady Willis, and the noble Lord, Lord Krebs, makes it clear that, for an EDP, there is absolutely no compulsion for an assessment of the environmental impacts by a developer of the site that they are going to develop before they can go straight to an EDP. How can you have planning conditions for a site where you do not even have an obligation to identify what the environmental impacts are?

We have heard from meetings with civil servants that they have been drawing up plans for two EDPs on nutrient neutrality and newts, so they must have some idea of what the type of planning conditions might be. I would like a bit more information about how the planning condition process might work and what it might be in order to give noble Lords more information before we get to Report. I have to say that I feel that being able to move straight to pass “Go” and avoid the mitigation hierarchy is a massive hole in this new system. As my noble friend Lord Russell has said, other parts of government have managed to find ways to incorporate it in equally important areas of infra- structure development.

My Lords, I thank the Minister for confirming earlier that the environmental principles policy is still in place. That matters in this particular group in terms of the mitigation hierarchy. When the Bill came through, the OEP expressed significant concern about the weakening of the mitigation hierarchy. I am not aware of its opinion on subsequent government amendments in that regard, but, of the five principles set out in the Government’s policy statement, “prevention” is a key element and “Rectification at source” is another one of the five principles.

We are trying to make sure this is crystal clear in the Bill and locked in because of comments made by the Minister in the Commons about flexibility. It is fair to say that, frankly, Clause 66(3) completely sets aside the mitigation hierarchy; to use the phrase of the noble Baroness, Lady Young of Old Scone, it is cash for trash —basically, you can do what you like if you are prepared to pay for it. In that regard, it matters that the Government think again and put this in place in primary legislation. Despite that, Amendment 256ZA in particular is very useful where it talks about “reasonably practicable”. That is an element that, if necessary, can be tested in the courts in due course. But we need to correct this in this House, putting it very firmly instead of saying, as in the words of the Minister, “Our flexibility is fine”.

My Lords, Amendment 340 proposes a new Clause after Clause 87. This amendment would enshrine clear duties on both the Secretary of State and Natural England to take all reasonable steps to avoid, prevent and reduce significant adverse environmental effects when exercising their functions under Part 3. It would require them to enhance biodiversity to safeguard designated sites—such as the European and Ramsar sites that we have heard mentioned in the previous group—except in exceptional cases, and to protect irreplaceable habitats such as ancient woodland and veteran trees.

I thank the noble Baroness, Lady Freeman, who has signed the amendment. She sends her apologies and says:

“This amendment provides a great opportunity for the Government to clarify the core commitments to existing nature protection that they have stated should remain in the Bill. This amendment is an essential clarification and strengthening of legal duties that already underpin environmental protections but risk being diluted under the new framework established by Part 3. While the Bill aims to streamline development and introduce strategic fund-based mechanisms for environmental management through both EDPs and the nrf, there have been legitimate concerns that existing protections might be weakened or circumvented”.

So this amendment does not obstruct development. It ensures that decision-makers uphold critical environmental principles consistently and transparently. It explicitly requires the Secretary of State and Natural England to take all reasonable steps to avoid causing significant harm, applying the fundamental mitigation hierarchy that we have already talked about and which prioritises avoidance first, minimisation second and compensation only as a last resort.

The amendment’s emphasis on enhancing biodiversity aligns directly with the Government’s own Environmental Principles Policy Statement, which guides all departments to embed environmental protection in their decision-making, and it places biodiversity improvement alongside harm avoidance as a clear statutory duty. Of particular importance is the protection afforded to irreplaceable habitats, as I have mentioned already. These are a unique and fragile ecosystem systems comprising just 2.5% of UK land yet supporting disproportionately rich biodiversity, and the NPPF rightly sets the loss of such habitats as a matter to be refused unless wholly exceptional reasons apply and compensatory measures are in place. Embedding this principle therefore in primary legislation strengthens the hand of conservation and local communities.

The amendment also correctly restricts where significant adverse effects on European and Ramsar sites may be permitted—only where justified by imperative reasons of overriding public importance—and where compensation will occur. This follows long-established environmental law and international obligations, and provides clarity. I look forward to hearing the Minister’s response.

My Lords, I shall start by introducing my Amendment 346DF and, in the interests of brevity, will avoid detailed comments on the other amendments in the group.

My amendment is, by its nature, probing. It would require the Secretary of State to report on the potential benefits of removing distance from the biodiversity metric when measuring the biodiversity value of registered off-site biodiversity gain under paragraph 4 of Schedule 7A to the Town and Country Planning Act 1990. This is important because the current system rightly places a heavy weighting on proximity. My amendment does not necessarily fit so well in this group, but there was no sense in having a separate group for just one focused amendment with a specific request. It simply poses the question to the Government: if proximity carries limited weight in designing EDPs, why should it continue to carry so much weight in the BNG market? This risks handicapping the private market for these services versus EDPs.

Currently, developers pay far less for BNG and nutrient neutrality units when further afield than when local, which translates to lower prices per unit and lower incentives for landowners to develop BNG units. We on these Benches remain convinced that the proximity of the offsetting actions’ location to where the damage is being done remains an important principle, which we will defend. However, if the Government were to insist that this is not the case in the EDPs, this amendment would seek to protect the ability of private developers of BNG units to compete. There is an argument, which holds weight, that if mitigation actions cannot be done locally, further afield may be acceptable. But in that case, it holds that the choice should be made based on guidance and availability, not price.

I turn to the arguments raised in this group of amendments, which we support. We are proud of the work done in the Environment Act 2021 to enshrine the mitigation hierarchy in law through biodiversity net gain. It has taken some time to implement but now works better every day. Developers are increasingly comfortable with it. Supply of BNG units is increasing, providing valuable income to landowners and funding for environmental NGOs. Given that, it is hard to understand where the problem is in planning that Part 3 is trying to fix. Perhaps most importantly, nature restoration is already happening at increasing scale around the country through the current system. Why undermine it? By not protecting the mitigation hierarchy within the application to the nature restoration fund and the design of EDPs, the Bill continues to represent a regression in environmental law in this country. It also undermines the competitiveness of BNG developers in providing solutions for housing and infrastructure developers.

In conclusion, the amendments we have discussed today reflect a common desire to protect the mitigation hierarchy and ensure it is embedded into all aspects of the nrf and EDPs. I hope the Minister will support this and offer encouragement.

I thank noble Lords for taking part in this debate on the mitigation hierarchy. I have listened carefully and very much recognise the concerns that are being raised. These amendments seek to add provisions that require Natural England and the Secretary of State to apply the mitigation hierarchy when considering whether to produce an EDP, and in its production and implementation. By introducing a more strategic approach to addressing the impact of development, the Bill deliberately provides an appropriate degree of flexibility to Natural England to design conservation measures to deliver improved outcomes for the environmental features that are subject to an EDP. The noble Lord, Lord Gascoigne, when he introduced his Amendment, noted that the NPPF includes consideration of the mitigation hierarchy in respect of individual planning applications. I was not going to mention it, but because he did, I thought I had to.

As we have set out, the nrf is a strategic model. While I want to reassure noble Lords that the mitigation hierarchy lives in this model and is integral to the model we are trying to get across, it cannot be considered in the same way as an individual planning application. Again, I stress that the NPPF is a statutory model. You cannot just ignore it. It is part of the application process. So, we would expect Natural England to consider this throughout the process and use tools such as the ability to request planning conditions to avoid and reduce impact as key elements of an EDP. In preparing an EDP, Natural England will always be mindful of the benefits of avoiding impacts before they occur. Taking action locally which benefits the same protected feature that is being impacted by development will be the default under an EDP. This places a kind of ecological lock on the use of network measures, which can be used only in cases where it is clear that taking action elsewhere would be more beneficial to the environmental feature.

In addition, when making the EDP, the Secretary of State will have due regard to the environmental principles policy statement, in line with the Environment Act 2021. This will ensure that important principles, such as the precautionary principle and the rectification at source principle, are considered. Ultimately, the overall improvement test will require that each EDP demonstrates how the conservation measures will secure an environmental uplift that goes beyond the offsetting that is achieved under the current system.

Returning to Amendment 245, as I said, the principles are already incorporated into the existing provisions and further reinforced by the amendments we have tabled. As the noble Baroness, Lady Parminter, said, Natural England can request that planning conditions be imposed on development, ensuring that impacts are minimised. As I have explained, network measures can be implemented only when doing so would lead to greater improvement. The noble Baroness asked for future information. Let us get together before Report; I will get that information for her and share it with noble Lords.

Natural England will always consider the environmental principles when preparing an EDP, and the Secretary of State may make one only if it meets the overall improvement test. Therefore, the additional flexibility provided for by the nature restoration fund can be used only to deliver better outcomes for the environment.

I turn to Amendment 251 in the name of the noble Earl, Lord Russell, and Amendment 301 in the name of the noble Baroness, Lady Willis, who is not in her place. These amendments would require a developer to demonstrate that they have applied the mitigation hierarchy before Natural England can accept their request to use an EDP. The clear aim of the nature restoration fund is to deliver a win-win for both development and the environment. A fundamental element of delivering this is to reduce the amount of time and money spent on individual environmental assessments and refocus these efforts on strategic action to improve environmental outcomes at scale.

The EDP itself is required to consider the impact of relevant development on the environmental feature and propose appropriate measures to address and materially outweigh this impact. The plans will be underpinned by the best scientific evidence and will include actions to avoid impact, as well conservation measures to address and outweigh impact. As such, requiring developers to undertake individual assessments risks eroding the value of the EDP, adding costs to individual development, which we think would reduce the utility of relying on EDPs. Where an EDP is in place, the overall improvement test ensures that outcomes for the environment will be better than the existing system, so it is vital that we embrace the opportunity to streamline the process in order to deliver this win-win.

The noble Earl, Lord Russell, tabled Amendment 275, which seeks to require that Natural England may decide to prepare an EDP for a protected feature only if two conditions are met: first, that Natural England has followed the mitigation hierarchy; and secondly, that the EDP would contribute to a significant environmental improvement in the conservation status of the relevant environmental feature at an ecologically appropriate scale. I have just addressed the first condition, so I will focus on the second.

The existing provisions in the Bill already require the Secretary of State to consider whether the overall improvement test is met once a draft EDP has been prepared and presented. Requiring Natural England to consider that same test at an earlier stage would not be possible because neither the detail of the proposed conservation measures nor the environmental impact of the development it is intended to address would be known at that stage. We think that the correct point to apply the overall improvement test will be after the EDP is drafted, not before.

The amendment also proposes a modification to the overall improvement test to require that conservation measures significantly and measurably outweigh the environmental impact of development. This was addressed previously, so I will not repeat it here, except to say that the Bill requires that conservation measures must address the environmental impact of development and, additionally, contribute to an overall improvement in the conservation status. We have clarified that with the amendments we have tabled.

Turning to Amendment 256ZA, tabled by my noble friend Lady Young, the Government’s amendments to Part 3 make it clear that network measures may be taken forward only when Natural England can set out how the approach will make a greater contribution to the improvement of the conservation status of the feature than an on-site measure. We are clear that the flexibilities will not come at the expense of action to avoid impact, and the Bill provides powers to address such actions and secure that they are taken through the use of planning conditions. There is also the opportunity to scrutinise the proposed conservation measures, including actions proposed to avoid impact, during the consultation on each EDP. The Secretary of State will also have due regard to the environmental principles policy statement, and see that other important principles are considered.

Turning to Amendment 340, tabled by the noble Baroness, Lady Grender, the overall improvement test is central to the nature restoration fund. I have gone into some detail about how that is supposed to work, but the proposed requirement to apply the mitigation hierarchy rigidly would restrict an EDP’s ability to meet the overall improvement test strategically. As I said, an EDP cannot be made unless the Secretary of State is satisfied that it will meet this test. Any flexibility in applying the mitigation hierarchy should be seen through this lens. The nature restoration fund does in limited circumstances allow Natural England to propose conservation measures which benefit the environmental feature in a different location.

Turning to irreplaceable habitats, the Bill does not amend or disapply the NPPF. Therefore, the existing policies remain unchanged. An EDP could be applied to an irreplaceable habitat only where it was also a feature of a protected site. Even then, an EDP could not allow for the loss of irreplaceable habitats, as it would simply not be possible to satisfy the overall improvements test in these circumstances. Finally, it is not clear what the proposed requirement to consider enhancing biodiversity would add, as the Bill is clear that an overall improvement must be achieved in relation to the protected feature to which the EDP relates.

Finally, on Amendment 346DF, in the name of the noble Lord, Lord Roborough, we have recently concluded a consultation on improving the implementation of BNG for minor, medium and brownfield development. Among the options is a proposal to streamline the BNG metric process. We might be interested to pick this up and discuss it further, because the Government are currently considering their response, and we will be publishing our outcomes in due course. New legislation requiring government to lay a report on this matter is therefore not necessary at this stage, so I hope the noble Lord will withdraw his amendment.

This has been a really important debate. It has raised a number of issues which I am aware that noble Lords would like to discuss further, and this is something we should specifically pick up in discussions ahead of Report. With these explanations, I kindly ask noble Lords not to press their amendments.

I am grateful to all noble Lords who spoke to that group, not least the Minister. I apologise for incorrectly prejudging what I thought she would say—I obviously got it completely wrong, and I apologise.

The noble Earl, Lord Russell, got it right when he said that this group and the previous one are the nub of the problems with the EDP Part 3. I am not saying there are other things, but this goes to the heart of how we try and make the Bill a win-win for both development and nature. I do not want to dwell too long. I am grateful that the Minister said that we will come back to that. It is worth our coalescing and having another shot at it, if we may, but, with that, I beg leave to withdraw my Amendment.

Amendment 245 withdrawn.