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Planning Bill

My Lords, for my security, I remind the House of interests that I have previously declared in this field. I preface my remarks by assuring the noble Lord, Lord Best, that I support his plea for social housing to be exempt from CIL. We need to remind ourselves that Section 106—which, if you listened to the noble Lord, Lord Best, you might think was devoted to social housing—is in fact devoted to a much broader spectrum of infrastructure. I will list merely some of it: off-site road improvements, which may be some way away but can be of significant benefit to the community; off-site major extensions to sewage works; off-site recreational facilities in the form of playing fields; and many other things of that ilk. A Section 106 negotiation with the local authority depends very much on the balance of those facilities and how much the local authority thinks that it can, so to speak, screw out of the developer in total. There is an individual negotiation on every development. The local authority usually finishes up well satisfied, and the original landowner or developer usually finishes up reasonably satisfied. The balance may depend on all sorts of things. It depends on the priorities of the area at the time. Not least of the complications—this is one of the great difficulties that we face—is trying to assess the impact of CIL on those negotiations, which is why earlier, slightly tongue in cheek, I suggested that where Section 106 applies, perhaps CIL should not apply. If CIL is an additional factor in the negotiation—we will know what the CIL factor is—it will certainly absorb the proportion of benefit that is negotiable for the local community because it will be a fixed sum in the first instance. It will be there, and it will be absolute. The CIL negotiations will start after that. CIL will not be additional to the sum that can be raised; it will be a part of the sum that can be raised. We must recognise that, with CIL in place, the negotiation on Section 106 arrangements will be proportionately diminished. That may conceivably have an effect on the totality of the provision of social housing, although it is impossible to say for sure. That is the brutal reality with which we have to deal. This is where we get into a different sort of negotiation over the meaning of infrastructure and so on. I absolutely support in simple form the principle that the noble Lord, Lord Best, is applying. I entirely agree with his amendment in so far as it states that social housing should not be eligible to be charged for CIL. That is an absolutely correct principle, but when one gets into the wider fields of what he was saying, I am afraid that when one starts to deal with Section 106, the negotiation will be quite harsh. The noble Lord is absolutely right to mention the enormous change in the atmosphere in which we are now discussing these proposals from the atmosphere in which the Government prepared the Bill. In that brief period, we have seen the virtual collapse of the housing industry. My understanding, as I said at an earlier stage of the Bill, is that applications for housing development have virtually disappeared from planning committee agendas, because no one knows where anything is going or indeed what the value of the assets about which they are talking might be. They might still be able to calculate their construction costs with a degree of accuracy, but no one knows what the site value is and no one can really say what the underlying value of any product might be. Until those issues are clarified, this standstill will continue. The noble Lord, Lord Best, and others were absolutely right earlier in the day when they said that, for a time, most authorities will not want even a hint of CIL to be floating around as an additional charge on development, because most of them will be desperate to see the construction process recommence. If there is a hint of an additional charge, it will delay that construction. It is in no one’s interests that the construction industry is at a standstill for a day longer that it has to be. To be honest, when I look at the Bill, I feel rather as I felt when I was in Syria a little while ago—as though I am looking at historical remains that have been newly excavated and exposed, and are in perfect form to some degree, although we have been criticising it like mad. It is a little like digging out a wonderful bit of wreckage from a different era, because the change in atmosphere has been so great. So while I support the noble Lord, Lord Best, in the principle of his proposal, I do not accept the totality of his argument. We need to recognise that we are now—tragically, dare I say—in desperately different circumstances. To some degree, all our discussion on the community infrastructure levy is academic, which it will remain for some time until there is a reasonable recovery in the construction industry.