New Clause 11

Localism Bill – in a Public Bill Committee on 10th March 2011.

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Brought up, read the First time, and Question proposed (this day), That the clause be read a Second time.

Question again proposed.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

I remind the Committee that with this we are discussing the following: new clause 15—Efficient and effective planning—

New clause 19—Compensation for compulsory purchase—assumptions as to planning permission—

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

If I had kept an eye on the clock, I would have concluded my remarks before we were obliged to adjourn. However, I think I have responded to the constructive points made by my hon. Friend the Member for St Austell and Newquay.

The Bill will enhance the role of plan making and give local people a far greater ability to have their wishes expressed in plans. When decisions depart from that, which I hope will be rarely, it is right that locally elected people, rather than the inspectorate, make the decision. I shall reflect on the Bill’s provisions to ensure that the primacy of the plan is unambiguous, as we intend. In fact, some weeks ago, when we considered amendments about establishing the importance of plan making over the development control appeals route, I undertook to reflect on whether we could make the provisions even less ambiguous. I will certainly do that, and I hope that that answers the understandable concerns raised by my hon. Friend. I hope that he has been persuaded to withdraw new clause 11, to which I am grateful to have had the chance to respond.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

I would like to speak to new clause 19, which is about compensation for compulsory purchases. It is a pleasure to serve under your chairmanship, Mr Amess, particularly now that we have reached the new clauses in the Committee’s last sitting.

Locally led regeneration is crucial to our communities, but there is a feeling that it is being undermined by the system for compulsory purchase and compensation. As we know, local authorities use compulsory purchase orders to secure the control of land that they need to deliver the regeneration of an area, and that is essential to the delivery of infrastructure such as Crossrail. The statutory provisions that govern the compensation payable for compulsory purchase are now widely thought to be over-complicated and, in some cases, out of date. That can result in extended negotiations and, unfortunately for those involved, litigation. Compensation payments to landowners can be delayed and can become unpredictable, and I will give examples of that.

One area of particular concern is how to ascertain the planning status of land that is being compulsorily acquired. To assess the value of land for compensation purposes, assumptions must be made about what development might have been permitted through the planning system were it not for the compulsory purchase order. For example, could a dilapidated factory that is being acquired have been redeveloped for housing, or must it have remained in industrial use? Clearly, reaching the right answer to that question can have a dramatic effect on the compensation paid for the land.

There is a feeling that the rules governing the statutory planning assumptions are in need of reform. That has been highlighted in the Lands Tribunal, the Court of Appeal and the House of Lords—the Supreme Court will now be the final court of appeal. Two cases in particular have resulted in seemingly perverse outcomes that demonstrate the failings of the existing system. In the case of Greenweb Ltd v. Wandsworth council, the claimant received compensation in the Court of Appeal of £1.6 million for a piece of land that was 0.22 acres, or some 20 yards by 50 yards. It was established to be worth only £15,000 outside the compulsory purchase system, and it had been bought for £30,000. In that case, we had £1.6 million versus £15,000. A little-known law that was intended to compensate victims of German wartime bombing had been invoked during the procedure, which meant the land had to be valued as if it had planning permission for housing, when it had, since 1979, had planning permission only for use as open space. Wandsworth council therefore had to pay £1.6 million for the land, rather than some price between £15,000 and £30,000.

Press reports from that time make interesting comments on the case. The judge who reluctantly ordered Wandsworth council to pay that very large sum described the law as “utterly deplorable”. The council appealed against the valuation by the Lands Tribunal, arguing that the law was absurd, but three Appeal Court judges upheld the decision, while making clear their serious concerns about the fact that the legislation, based on wartime bombing, still existed. Lord Justice Sir Richard Buxton called on councils to lobby the Government for repeal of the law to avoid

“the unmeritorious deprivation of very scarce funds that occurred in this case”.

Lord Justice Sir John Thomas said it was “highly regrettable” that taxpayers had to fund the purchase of the land for more than 100 times its true value, and Lord Justice Sir Stanley Burnton said that he upheld the law “most reluctantly”.

The second case shows the law working the opposite way. In Spirerose v. Transport for London, the claimant received significantly reduced compensation in the House of Lords, compared with that awarded by the Lands Tribunal and later supported in the Court of Appeal. A legal technicality meant that the land could not be valued as if it had planning permission, although it almost certainly would have got it; it could be valued only according to the hope of getting planning permission, which is a much weaker claim. Transport for London had to pay only £400,000, as opposed to the £608,000 that the land was said to be worth.

Interesting press reports tell us that Michael Orlik, an expert in public law, said:

“It may be that Parliament should consider whether the present system is fair to landowners or whether the law should be changed. The case will have important implications for compulsory purchase valuations. The difficulty with this decision from the point of view of landowners facing a compulsory purchase is that once a Government body or local council has announced its decision to proceed with a new project by compulsory acquisition, the landowner will not be able to obtain planning permission for an alternative scheme because the land is required for a public purpose. He will therefore”— as in this case—

“only be able to obtain hope value, not the full development value. I think this is something Parliament may need to look at.”

The Greenweb v. Wandsworth council case was in 2008, and the Spirerose v. Transport for London case was in 2009, so they are recent cases. In the second case, the constraints of the current law prevented a proper assessment of the planning status of the land at the valuation date.

New clause 19 would prevent the issues involved in those two cases and similar issues from occurring, and the Bill is a suitable place to introduce that new reform. The new clause would replace the statutory planning assumptions in sections 14 to 21 of the Land Compensation Act 1961 with ones based on the recommendations of the Law Commission reports, “Towards a Compulsory Purchase Code”, which were published in 2003 and 2004.

The Minister may tell me that the previous Labour Government could have done something at the time. If he does, I shall say that it was not considered a priority to bring forward a planning Bill, but this Bill, which we have debated for so many weeks, can change that situation; much is already changing in planning legislation, with the localist principles being brought in for neighbourhood planning, and the new policy planning framework.

The new clause would introduce a new alternative development certificate that is more relevant to the modern planning system than the certificate of appropriate alternative development that it would replace, and it would be of more assistance in assessing compensation. The new certificate would reflect the planning situation at the date on which the compensation is assessed, whereas the existing certificate is based on the planning situation when the compulsory purchase order was first made. Clearly, a in compulsory purchase might have been made decades before such a situation arises. The new certificate would be issued by the local planning  authority, as is currently the case, but appeals would be to the Lands Chamber of the Upper Tribunal, rather than to the Secretary of State—given the other provisions in the Bill, we should perhaps consider easing the load on the Secretary of State. The Lands Chamber of the Upper Tribunal also determines disputes on compensation for compulsory purchase generally.

The case for reform through the new clause is supported by the Compulsory Purchase Association; the Royal Institution of Chartered Surveyors; the Law Commission, obviously; the Institute of Revenues Rating and Valuation; and the planning and environment committee of the Law Society. Those who acquire land and those who represent landowners whose land is being acquired recognise the need for reform. Situations do not often arise in which we can see injustice on both sides of a case—for those having to pay for land and for those trying to sell it.

The new clause would not change the basic approach to compensation for compulsory purchase. It would provide the same broad rights within a clearer and fairer system that would allow land required for regeneration and infrastructure to be acquired compulsorily, with a more efficient use of public and private resources. Given everything that we have said in Committee and in the House recently, it is important to help councils that are in situations such as that faced by Wandsworth council. Most importantly, the change would save local authorities much-needed resources and would help to encourage regeneration schemes, which are vital for the growth that the economy needs.

Photo of Jack Dromey Jack Dromey Shadow Minister (Housing)

We are in our last sitting, Mr Amess, so I want to say that it has been a privilege to serve under your chairmanship and that of my hon. Friend the Member for York Central (Hugh Bayley).

Like the hon. Member for St Austell and Newquay, I am a new boy, albeit an older one. It has been a fascinating experience, and the Committee has done important work, with mature debate. We have had sharp disagreements, but we have found a degree of consensus too, particularly on the planning provisions. We hope that will be carried forward in the next stages, with much-needed changes to the Bill, not least because as it stands, it is a bizarre combination of localism and Leninism. Those with a memory of Soviet history will recall the legend, “All power to the Soviets”—I am not sure that it was all power to the parish councils—which gave way to a determined centralism in the old Soviet Union. The Secretary of State wants to retain 142 powers at the centre, so changes are needed in the Bill. I am not sure that a new legend of “All power to the Pickles” would inspire the people of Britain.

I wish to speak to new clause 15, which is an enabling clause to ensure that the recommendations in the Killian-Pretty and Penfold reviews are implemented as soon as possible. Those reviews were commissioned by the previous Government to simplify the planning system and were widely endorsed across the spectrum. At present, the Bill does not introduce any powers to bring forward the recommendations of Killian-Pretty and Penfold, some of which would require change to existing statute. It would be helpful, therefore, to have an enabling clause that allowed change to be made to statute where it met the crucial test of securing an efficient and effective planning system.

In recent years, a great deal of progress has been made in modernising and simplifying the planning system, even if only in finding common ground on the fact that further changes are necessary. Along with other work, that has included the Barker review of land use planning in 2006, the planning White Paper in 2007, and the subsequent Planning Act 2008.

The Killian-Pretty review, which was published in November 2008, moved the reforms on by making a range of recommendations for further improvement to the planning regime. Those recommendations related to proportionality, process, engagement, culture and complexity. The Penfold review was established later to explore whether the process for obtaining non-planning consent delayed or discouraged businesses from investing. It focused on changing working practices, simplifying the landscape, improving the interaction between planning and non-planning consents, managing the landscape and so on. I stress again that those things commanded substantial consensus across the political spectrum and in the world of planning. Not all of them commanded consensus, but most did. New clause 15 would ensure that the recommendations in the Killian-Pretty and Penfold reviews can be taken forward at the next stages. We would welcome the Minister’s comments.

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills) 1:15 pm, 10th March 2011

I am grateful to the hon. Members for Worsley and Eccles South, and for Birmingham, Erdington, for raising the issues. The hon. Lady proves herself an accomplished parliamentarian when she anticipates the arguments that I will deploy against her and effectively rebuts them, so I will not say that the situation reflects badly on the previous Government because they did not take up the chance to deal with a very real set of concerns. She is right to draw our attention to the courts’ determinations over a period of time.

Our reason for not including the measures in the Bill—as every Member of the Committee knows, it is already pretty full with 207 clauses—is, I am sure, the same as the previous Government’s reason: in legislation, we have to draw a line somewhere, and the matters are quite technical and complex. We judged, perhaps incorrectly, that the appetite of the Committee to take on more than 207 clauses might be limited, but that is clearly not the case. Such is the enthusiasm under your chairmanship, Mr Amess, that there is clearly appetite for more.

I will reflect seriously on what the hon. Lady, who has been expertly advised, has said. We will sit down with those experts to consider whether, if we were to find space, it would not open up a whole set of other concomitant changes and amendments to the law that might seriously overburden our work. I cannot give a commitment that we will be able to include the measures, but I will certainly, with an open mind, consider the representations that she and others have made to see whether we can do so.

I now come to new clause 15, tabled by the hon. Member for Birmingham, Erdington, which is once again a Henry VIII clause that he urges on us. I find myself shocked once again.

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

It is clearly the hand of history. The hon. Member for Birmingham, Erdington, referred to the Soviet Union; the new clause establishes powers for a Tsar to exercise. The hon. Gentleman was described to me as the power behind the throne in the Labour party these days. Perhaps he is the Rasputin of the Labour party. Perhaps he has had a conversion during the Committee and has reflected on the use to which he could put the clause if ever he were in office; he might find such clauses convenient.

Photo of Jack Dromey Jack Dromey Shadow Minister (Housing)

I am aware of the Government’s rather interesting “one in, one out” approach towards regulation; Opposition Members would settle for “one in, 50 out.”

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

The hon. Gentleman takes an ingenious approach. All I can say is that I am very glad that the sensibilities of the right hon. Member for Greenwich and Woolwich are not offended. He is not with us this afternoon, but his blood pressure would have risen again and the words “constitutional outrage” would no doubt have been on his lips.

We endorse the conclusions of the Killian-Pretty and Penfold reviews. They were both excellent reports, and all three authors have done a service to the country through the work that they put into their reports and the recommendations that they made. Of course, in the Bill, we are taking into account many of their recommendations. The simplifying of national planning policy, acknowledging the crucial importance of pre-application discussions, and community engagement are very much part of the Bill. There is a lot in the Bill. We found, on reflection, that we did not need the power to introduce the other measures that are necessary. There is other statute, including the Town and Country Planning (Development Management Procedure) (England) Order 2010, that can, I am advised, be used to that effect.

If the hon. Gentleman looks at the drafting of the Bill, I am sure that he would not consider that we have been reluctant to recommend procedures for simplifying things, with the best of intentions, when necessary. I daresay he will be comforted to hear that we do not consider the new clause necessary to implement the useful and important measures in the Bill. If he is looking forward to a future role for himself, I fear that we are going to deprive him of having this particular power if our positions are ever reversed. With that reassurance that the measure is not necessary to achieve what is aimed at, I hope that he will not press new clause 15 to a Division.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

We will not press new clause 15 or new clause 19 to a Division, which will save a bit of time and will be popular with the Committee. I thank the Minister for his assurances on new clause 19. There is an important issue there, and much as the Government always seem to have other opportunities to bring forward legislation, the Bill seems the right place for the measure, so I hope that the Minister will look seriously at it. We have urged that many other clauses be withdrawn, so if he is keen to keep his Bill to 207 clauses, I can suggest a few others that he might leave out.

Photo of Stephen Gilbert Stephen Gilbert Liberal Democrat, St Austell and Newquay

I am grateful to my right hon. Friend the Minister for his comments on new clause 11, but I want to press him  slightly further on a few points. Importantly, my right hon. Friend acknowledged that under the reforms, departures from a local or neighbourhood plan would still be possible. He said that some degree of flexibility was necessary and that the question was who should decide on such departures. He said that rather than the remote and unelected Planning Inspectorate, it should be the local authority that decides, as it is better placed to make a sensitive judgment, and I completely agree with that.

Of course, the local authority already makes the decision when planning consent is a departure from the local plan, and it must advertise that when it occurs. Under the reforms, local authorities are meant to draw up plans in close consultation with local communities. In those circumstances, if the local authority agrees on a departure from the plan, it is fair for the community to have a further right of appeal. It is an important check, so that if a community decides to challenge a departure, the matter can be looked at again by an independent body—in this case, the Planning Inspectorate. If the Planning Inspectorate is the right body for developers to appeal to—there is nothing in the Bill that restricts or removes those provisions—why is it not also the correct body for local communities to have recourse to in limited circumstances?

It is still my contention, and that of my hon. Friend the Member for Bradford East, who sadly cannot be with us today, that a limited community right of appeal would be an important check and balance in the Bill. It would add to the suite of community rights and would be an important check against the ability of developers to steamroller unwanted applications through. I must say that new clause 11 is supported by several well-respected organisations, including Friends of the Earth, the National Trust, the Open Spaces Society, the Royal Society for the Protection of Birds, the Woodland Trust, the World Wildlife Fund, the Campaign for National Parks, Buglife and Amphibian and Reptile Conservation. I am particularly grateful for the support that the Campaign to Protect Rural England gave in researching the new clause.

My right hon. Friend the Minister has brought another red herring—if I may put it that way, Mr Amess—to the Committee’s attention, which is the question of cost. At the moment, a planning application can ultimately be appealed through judicial review, which is hugely expensive, complicated and time-consuming for local communities that go down that route. New clause 11 simply says that we need a level playing field when it comes to the rights of the developer and the rights of the community. I welcome the Minister’s commitment to reflecting on the matter. With that in mind, I am happy to withdraw the new clause for now, although I signal my intention to return to the matter on Report. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.