Clause 1

Planning and Energy Bill – in a Public Bill Committee at 9:15 am on 20 February 2008.

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Development plans

Question proposed, That the clause stand part of the Bill.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

With this it will be convenient to discuss the following: Amendment No. 2, in clause 2, page 1, leave out lines 15 and 16.

Amendment No. 3, in clause 2, page 1, line 17, after ‘in’ insert ‘Part 2 of’.

Amendment No. 4, in clause 2, page 1, line 21, leave out subsection (2).

Clause 2 stand part.

New clause 1—Energy policies—

‘(1) A local planning authority in England may in their development plan documents, and a local planning authority in Wales may in their local development plan, include policies imposing reasonable requirements for—

(a) a proportion of energy used in development in their area to be energy from renewable sources in the locality of the development;

(b) a proportion of energy used in development in their area to be low carbon energy from sources in the locality of the development;

(c) development in their area to comply with energy efficiency standards that exceed the energy requirements of building regulations.

(2) In subsection (1)(c)—

“energy efficiency standards” means standards for the purpose of furthering energy efficiency that are—

(a) set out or referred to in regulations made by the appropriate national authority, or

(b) set out or endorsed in national policies or guidance issued by the appropriate national authority;

“energy requirements”, in relation to building regulations, means requirements of building regulations in respect of energy performance or conservation of fuel and power.

(3) In subsection (2) “appropriate national authority” means—

(a) the Secretary of State, in the case of a local planning authority in England;

(b) the Welsh Ministers, in the case of a local planning authority in Wales.

(4) The power conferred by subsection (1) has effect subject to subsections (5) to (7) and to—

(a) section 19 of the Planning and Compulsory Purchase Act 2004, in the case of a local planning authority in England;

(b) section 62 of that Act, in the case of a local planning authority in Wales.

(5) Policies included in development plan documents by virtue of subsection (1) must not be inconsistent with relevant national policies for England.

(6) Policies included in a local development plan by virtue of subsection (1) must not be inconsistent with relevant national policies for Wales.

(7) Relevant national policies are—

(a) national policies relating to energy from renewable sources, in the case of policies included by virtue of subsection (1)(a);

(b) national policies relating to low carbon energy, in the case of policies included by virtue of subsection (1)(b);

(c) national policies relating to furthering energy efficiency, in the case of policies included by virtue of subsection (1)(c).’.

Amendment No. 5, in title, line 1, leave out ‘generation’ and insert ‘use’.

Photo of Michael Fallon Michael Fallon Chair, Treasury Sub-Committee

I hope that the Committee will bear with me while I explain what we propose to do. I shall be asking hon. Members to vote against clause 1, and to vote in favour of new clause 1 and the amendments grouped with it. That is because I have been advised by the House authorities that, instead of tabling a whole series of amendments, it would be more appropriate to table such proposals as one new clause. Sadly, but inevitably, the new clause is longer than my original clause, which the House considered on Second Reading.

It is only right to say that new clause 1 reflects the intensive discussions that have taken place between the Department and myself, and other parties. I want to place on record my thanks to the Minister and her officials for the extremely helpful and constructive meetings that we have had since we discussed the Bill on Second Reading. I particularly appreciate also the assistance of the hon. Member for Southampton, Test, who has a long-standing interest in such matters and who assisted me at one of the meetings.

I draw the Committee’s attention to two main aspects of new clause 1. Subsection (1) is similar to the original clause 1, but with one significant improvement. The potential specification is widened to include near-site sources as well as off-site sources.  That significant gap in the Bill’s drafting was well articulated by the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Iain Wright), in his speech on Second Reading. He certainly convinced me that it needed improvement. We have therefore replaced the original words

“as part of the...development” with

“in the locality of the development”.

I want to make it clear to the Committee that “in the locality of” includes both on-site and near-site; it is certainly not an invitation to developers to prioritise near-site over on-site. It includes both.

The second improvement to clause 1 is made under subsections (5) and (6) of new clause 1, which ensure that new development policies must not be inconsistent with national policies. I thought originally that it would be possible to say that such policies must have regard to national policies, but I am assured that that would not have enabled us, for example, to have excluded remote sources and might otherwise have led the Bill into inconsistency with other national policies such as the right of consumers to choose their energy supply through a competitive market and the right of the Government and all of us to encourage more affordable housing. Those are the two major improvements in new clause 1 over the original clause.

Amendment No. 2 is an improvement because the definition of development plan that I spelt out in the draft is simply not necessary. Amendment No. 3 is technical and would tidy up the definition under the Planning and Compulsory Purchase Act 2004. Amendment No. 4 deals with Wales and would make it clear that that provision is better included in subsection (1). I hope that that explains the group that is before us. The procedure is slightly unusual because we want the amendments to be agreed to, but must first vote against clause 1. In due course, I will invite the Committee, if it so agrees, to vote against clause 1 standing part of the Bill.

Photo of Caroline Flint Caroline Flint Minister of State (Department of Communities and Local Government) (Housing)

This is the first time that I have been before you in Committee, Mr. Atkinson, and I look forward to future encounters.

In the brief span that I have been the Minister with responsibility for housing and planning, I am pleased to have had an opportunity to engage constructively and positively with the hon. Member for Sevenoaks. My hon. Friend the Member for Southampton, Test has also been party to some of our discussions on the revised Bill. Part of our discussion has been about how we can use the Bill to reinforce the direction of the planning guidance that is already available, which requests and requires local authorities to consider how they can reduce carbon emissions. To that end, we have sought to find a way forward that is positive on all counts through amendments to the Bill as outlined by the hon. Gentleman.

We are all agreed that we have to do a lot more in Government, in local authorities and as individuals to change the balance of how emissions affect our climate. In doing so, hopefully we can offer to future generations not only a cleaner and greener Britain, but a cleaner and greener planet on which to live.

I fully support the intentions behind the Bill. I know that on Second Reading my hon. Friend the Under-Secretary said that we were not initially convinced that the Bill was necessary, but I recognise the positives that can be taken from placing such a power in primary legislation. In particular, it will reassure local authorities that they can go further, faster than through building regulations and within a national framework. It will mean that there is no place to hide for local authorities who do not want to take up this agenda, a point that has been part of our recent discussions. It will enable us to underline everyone’s commitment to using local energy, including on-site and near-site green energy, in new developments. Although this might not be a realistic outcome, it could also protect against the possibility of there being no planning policy because if planning policy is cancelled, for whatever reason, the Bill will remain. Those are four examples of where the Bill reinforces our current guidance and targets in this area.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I am pleased to hear the Minister’s comments about the Government’s change in position. May I ask about her point that there will be no place for local authorities to hide? My understanding of the legislation is that it is an enabling Bill for local authorities, not a compulsion. Is that correct?

Photo of Caroline Flint Caroline Flint Minister of State (Department of Communities and Local Government) (Housing)

It is an enabling Bill, as can be seen from the text with the word “may”. However, I refer the hon. Gentleman to the “Planning Policy Statement: Planning and Climate Change”, page 16, paragraph 26, entitled “Local requirements for decentralised energy to supply new development”, which states:

“Drawing from this evidence-base, and ensuring consistency with housing and economic objectives, planning authorities should:

(i) set out a target percentage of the energy”.

I will not go through the whole subsection, but the paragraph continues:

“(ii) where there are particular and demonstrable opportunities for greater use of decentralised and renewable or low-carbon energy than the target percentage, bring forward development area or site-specific targets to secure this potential”.

Yes, it is an enabling Bill, but it is right to acknowledge that within the planning guidance there is a requirement for local authorities to tackle that area. The guidance allows some flexibility for local authorities in how they approach that and what sources of supply they might pursue, which is important. It refers to on-site and near-site, and allows local authorities, within building regulations, to move further faster. That was the ethos behind the Bill both in its first form and in our more recent discussions.

We have reached the stage where local authorities want to be engaged in that agenda. The house building industry is also very much taken by it and we are seeing some rapid changes in that sector and what it can do by using technologies to bring down the cost of creating zero-carbon homes. Again, I hope that that clarifies for the hon. Gentleman where the Bill stands.

As the hon. Member for Sevenoaks mentioned in his earlier contribution, it is important that the Bill is in harmony with the planning guidance that is already available and is not inconsistent with national policies  and objectives. Regardless of that, it still allows for a great amount of creativity and thought by local authorities to develop at a challenging pace that is faster than some of them may be up to. That is part of the challenge that we are setting out today.

We also have a wider package of initiatives to tackle the impact of climate change, including the Climate Change Bill, the Energy Bill and the Planning Bill, and this Bill is a complementary part of that package. The initiative to create a pathway for zero-carbon homes is well under way within my Department. We are making it easier for households to install equipment that will adapt their homes to renewable energy use. The planning policy statement on climate change to which I have just referred sets out our expectations for the planning system.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I have had a chance to read page 16 of the planning guidance, which ties in with what the Minister was saying a few moments ago about the Government’s desire to move forward with low-carbon housing. What sort of resources can local authorities draw down from central Government to help achieve that?

The document states that:

“Planning authorities should have an evidence-based understanding of the local feasibility and potential for renewable and low-carbon technologies”.

Essentially, that means that they must go out and do the research. That is great; it is welcome and positive. However, will it not simply cost council tax payers more, or is there a way of ensuring that they receive proper support from central Government?

Photo of Caroline Flint Caroline Flint Minister of State (Department of Communities and Local Government) (Housing)

A great deal of research is already being undertaken both within and outside of my Department. We will be providing detailed guidance on best practice and what the evidence base is telling us to help inform those at a local level. A number of partners are engaged with us to support local authorities so that they do not duplicate research in areas that are already covered. I am happy to write to the hon. Gentleman with further details of the research that is already available.

I will talk more about the more detailed guidance we will be providing that I hope will assist local authorities in planning on that area. Within the Department, the substantial change that will assist local authorities is from what the construction sector itself is doing and achieving. I met a representative of the UK Green Building Council yesterday to talk through some of the work already taking place in the area. It is very exciting. To a great extent, the industry has decided that a number of policy areas that the Government are interested in are the future and it has started to use its ingenuity, understanding and expertise. We are starting to see things move a lot faster than the Government could necessarily achieve on their own, and I am willing to acknowledge that.

It is far more cost-effective for the taxpayer if the industry moves in the right direction, particularly if it can demonstrate that it can bring down the cost of some technologies to the point at which the process  becomes viable. We are working in partnership with the sector to achieve that and our taskforce for 2016 is part of that work. I hope that fully answers the hon. Gentleman’s question, because it is obviously nice to say these things in Committee so that officials do not have to write long letters, as I am sure the hon. Gentleman is fully aware—there are smiles of relief from the box.

We have our own ambitions on zero-carbon homes. From 2016 we are expecting 240,000 homes to be built to zero-carbon standards, with intermediate steps in 2010, when we will set building regulations at standard level 3 of the code, and 2013, when we will set level 4 standards for building regulations. That is a challenge for the Government, the industry, house builders, the supply chain, local authorities and non-governmental organisations, but they all support that ambition. I am pleased that last year the Callcutt report confirmed that it is achievable, but it is a huge delivery programme and I do not underestimate the challenge within it.

Above all, we will need a co-ordinated programme so that we can minimise duplication and wasted effort and maximise co-operative learning, which also addresses the point raised by the hon. Gentleman. We need to provide a stable framework to give certainty for investment over the next eight years, and we are having positive discussions with the industry about a dedicated delivery body to co-ordinate that work.

The Callcutt report raised the legitimate concern, which we have attempted to clarify and deal with in our discussions with the hon. Member for Sevenoaks, that a plethora of different standards for house builders, however well intentioned, could get in the way of a co-ordinated programme. We clearly need to avoid a situation where there are different building standards all over the country, because it is in no one’s interests to fragment them. However, we recognise the fact that some house builders, and certainly local authorities, will want to go further and faster than the national timetable, and there will be circumstances in which it is justified to do so. We have tried to capture, through co-operation on the amendments to the Bill, the spirit of that challenge and ambition.

Photo of Michael Fallon Michael Fallon Chair, Treasury Sub-Committee 9:30, 20 February 2008

No one wants a plethora of different standards, but under the Bill local authorities will of course put forward different approaches and might want to increase the proportion faster. I hope that it is clear from the Minister’s interpretation of the phrase “not inconsistent with” that should a local authority want to go further and stipulate 20 or 25 per cent. of the energy a future Minister will not be able to say that is inconsistent with the original 10 per cent. that other people seem to be adopting.

Photo of Caroline Flint Caroline Flint Minister of State (Department of Communities and Local Government) (Housing)

I am confident that a local authority could go further forward faster, and there are of course some builders who are moving in that direction. For example, Berkeley Homes has said that all its new homes will be built to code level 3, which emphasises my point that companies can be seen to do the right thing and be competitive within the industry as well. Certainly, that is something that local authorities could consider when looking for development partners.

I am pleased to say that the Housing Corporation, in developments funded by English Partnerships, is also being required to build to code level 3 standards. That is an exciting and fast-moving agenda, which is why it is important to recognise that although we want to give some sense of what the evidence base is telling us now, we also have to be attuned to flexibility as technologies move forward. Some things that we may not think are possible today may be possible in the not too distant future.

We welcome the fact that house builders and local authorities are already working together on some good developments, and that local authorities could clearly introduce policies to encourage and mandate that work, where circumstances justified it. The climate change planning policy statement sets out our policy in more detail. The Bill and the planning policy statement now complement each other in that important policy area. With regard to some of the detail, as I said before, it is important that references to energy efficiency standards make it clear that they are recognised standards that have gone through a proper process of review, discussion and debate. That is as much to protect local authorities in strengthening their argument as to ensure that the industry can work within the research that has been developed and agreed by different parties. In practical terms, that means the code for sustainable homes. The amendments leave it open for standards to be prepared by the Government or other bodies, such as the Building Research Establishment, which can then be endorsed by Government. That relates to my earlier comments about flexibility in this fast-moving area.

It is important to recognise that the question of reasonableness is reflected in the new clause. The new clause links “reasonable” to a requirement that policies adopted by local planning authorities through the Bill “must not be inconsistent” with national policy, as the hon. Member for Sevenoaks said. We must also acknowledge that legislative powers for local authorities cannot be set in a policy vacuum; local authorities operate within a broader policy framework, which is important if we are to move forward in an ambitious but sensible way.

I hope that I have outlined why the Government feel that the Bill can now be supported. Through discussion, we have taken out some of the risk elements in the first draft. Should the Committee support the Bill today, we will have something on the statute book that strengthens and enhances our existing planning guidance and other measures that we are taking through legislation, some of which is currently going through the House.

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

It is a pleasure to serve under your chairmanship, Mr. Atkinson. It seems that the progress of the Bill will be more straightforward and consensual than the Private Member’s Bill Committee that I served on this time last year, and I am pleased that is the case.

The Minister has spoken about the importance of co-operation and leadership from the building industry, and the opportunities that presents to act as a catalyst in improving standards. She is absolutely right, but we should not underestimate the Bill’s importance as a catalyst in that process. It is fair to say that some  local authorities have felt constrained by the existing framework; the Bill allows them to be ambitious and provides a statutory basis for their ambition, so that any uncertainties they may have had about being legally challenged can be swept out of the way. That is important and will open up great opportunities to push the envelope on what can be achieved.

I had a meeting yesterday with the Energy Saving Trust on exactly that issue, because we were discussing how ambitious the Government’s targets are and the challenges in meeting them. Our conversation revolved around the fact that if we are to meet those ambitious targets, it is important that there is flexibility on the ground and the creativity to maximise opportunities and address challenges at local level. Ambition on the ground will provide the best chance for the Government to meet their targets. Such things are difficult to impose centrally and if there is any sense that issues are being forced from the top down it could impede progress. On the basis set out in the Bill, however, we can see best practice. That may encourage the Government to keep up with that best practice and local authorities will compete with one another, so it is important for driving forward the agenda.

The new clause and amendments are entirely sensible. There are changes to the language to ensure that there is no confusion about the development plan. The changes that deal with energy generation in the locality, referring to near-site and on-site, are important and will reassure the building industry that it will not be constrained on some of those issues by the legislation. It is also important to ensure that the measures are consistent with national policy because ultimately any confusion will hold back progress in that important area. It is a great pleasure to welcome the Bill and to see it improved in Committee, and we support the changes proposed by the hon. Member for Sevenoaks.

Photo of Colin Challen Colin Challen Labour, Morley and Rothwell

I, too, welcome the Bill. I congratulate the hon. Member for Sevenoaks on bringing it forward and I welcome the Government’s support for it.

I have a query and a suggestion. We have all been sent a letter by the Home Builders Federation urging us not to support the Bill. That leads me to think that, at local level, the flexibility allowed in the Bill could lead to dogfights over local authorities’ plans to implement the Bill. At local level some people will try to get local authorities to go for the lowest possible target, but as the Bill allows flexibility it does not set a target and I feel that is an issue that the Government should look at closely in their guidance. The Minister referred to detailed guidance, and I would ask her to ensure that it is issued quickly and that it does not take many months or a year or two. We need strong guidance to back up the Bill and to prevent local dogfights—perhaps they will be a little more civilised, but on planning matters it often feels like a dogfight.

My second point is about resources. Another tenet of the Home Builders Federation’s argument is that it cannot afford to do these sorts of things. I think it can—I have looked at its profits over the last ten years, which have been immense. However, putting that to one side, I suggest that the Minister’s Department should be in touch with the Department for Business,  Enterprise and Regulatory Reform to discuss how it can maximise take-up of the low-carbon buildings programme. In the domestic sector it is anticipated that over the three-year period £10 million will be underspent because of the way that the rules were changed. That money could help local authorities to implement the planning schemes they want sooner rather than later, and it would address builders’ concerns that a huge extra cost will be attached to the Bill. I hope that those two things will be looked at closely.

Photo of Gregory Barker Gregory Barker Shadow Spokesperson (Environment, Food and Rural Affairs)

I am pleased to support the Bill. It has gone through difficult times but I am delighted that the Minister has been so constructive in her reaction to it in Committee. That is partly due to the persuasive work of my hon. Friend the Member for Sevenoaks, but I have no doubt that the wise counsels of her colleagues, the hon. Members for Morley and Rothwell and for Southampton, Test have also played their part. The striking contrast to her colleagues’ rhetoric on Second Reading is very welcome and augurs extremely well. We should work together constructively, not just in Committee, but in encouraging local authorities to take the initiative, be more progressive, push the envelope and be more ambitious. Across the House, if we can send out that message from Westminster, it will be very positive.

This is an enabling Bill, a permissive piece of legislation. It does not follow that anything will change as a result of the Bill or the amendments unless people on the ground decide to take the opportunity to invoke the new powers that local authorities will have.

The amendments, which have been clearly explained by my hon. Friend the Member for Sevenoaks, make for a tidier, neater Bill and we support them. However, I reiterate the point that the Government appear to have caught up now. We will judge the Minister in future by the high standard that she is setting herself in the Committee today.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test 9:45, 20 February 2008

I add my support for the Bill. As my right hon. Friend the Minister said, it will play a significant role in ensuring that local authorities that want to go further and faster than the code for sustainable homes suggests may do so, within a compatible framework that will be understandable to the people who undertake developments.

I have a little bit of sympathy with developers who seek clarity about how their developments will proceed in local authority areas. I should like to add one caveat in respect of the building code and the level at which a local authority may require buildings to be built under the enabling powers provided in the Bill. Where buildings are required to be built above a particular level of the code, it is inevitable that they will require some form of embedded microgeneration within the home. It is essential, in those circumstances, that the embedded microgeneration is subject to the same rules on electricity output as any generation that is retro-fitted to buildings. If such embedded generation does not, for example, receive the renewables obligation certificate that would accompany retro-fitted  generation for homes, there will be a considerable disincentive for developers to undertake the embedded generation fitting that will be a part of a code-level requirement put in place by a local authority under the Bill.

There are concerns about whether the embedded microgeneration will receive the same treatment, in terms of the ROC regime, as retro-fitted microgeneration. I hope that the issue can be clarified in the not too distant future to ensure that the procedure set out in the Bill can be followed with the full support of developers and with a genuine level playing field in respect of the requirements that will be placed upon developers when they are addressing the sustainable development code and the future extensions to it envisaged in the Bill.

Photo of Michael Fallon Michael Fallon Chair, Treasury Sub-Committee

We have had a useful debate. I am most grateful for the Committee’s support, not only for the Bill but also for the amendments moved this morning. I am particularly grateful to the Minister for the care she has taken over each of the amendments and for her support for them. I also appreciate the support of the hon. Member for Falmouth and Camborne and my hon. Friend the Member for Bexhill and Battle from their respective Front Benches.

A couple of substantive and important points have been made this morning. The hon. Member for Morley and Rothwell alerted us to developers’ fears, including, for example, that they might be asked unreasonably to comply with differing standards. Those fears are misplaced. Where Merton-style policies have already been applied, particularly in Merton itself, I am assured that developers had no difficulty at all in complying with what was laid down. I took trouble to satisfy myself on that point, because I did not want to be accused of in any way blocking or slowing development, particularly the development of low-cost housing.

Although the Home Builders Federation remains opposed to the Bill, the Committee might like to note that the British Property Federation wrote to me on Monday, saying that originally it had some concerns about the Bill:

“However, we have now reviewed the amendments that you have brought forward to the Bill and note that these appear to deal with those concerns very satisfactorily and constructively.”

The British Property Federation is lining up with the consensus behind the Bill, so I hope that in the fullness of time the Home Builders Federation will join it, too.

The hon. Member for Southampton, Test made the important point that embedded generation should not be put at any kind of disadvantage. I should like to reflect on that point. Perhaps the Minister and I could discuss it further before the next stage of the Bill to see if any further assurance can be given. It probably does not fall to me to give such assurance, but if there is more that we can do to satisfy the developers, we certainly should do it. I want developers to be part of the consensus. I want them to see innovation as being in their interest and to their benefit. Yes, some local authorities will move faster than others, but I want developers to be part of the process and to see the advantages.

There we are, Mr. Atkinson. I am most grateful for the Committee’s support for this group of amendments, which are an advance and will give councils the reassurance that they need in going further and faster than the  welcome guidance that was published by the Government in December. So with a final reminder to the Committee that we shall be voting no to vote out existing clause 1, I thank it for its support.

Question put and negatived.

Clause 1 disagreed to.