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Planning Bill

My Lords, I am sure that the noble Lord, Lord Dixon-Smith, feels perfectly justified in bringing the amendment back at Third Reading, as we have had a wider debate—a collective debate on several separate issues. I applaud his tenacity in bringing forward his concerns. He and I disagree about the issue—as he described it, the chicken and egg. I will address the amendment before I come on to questions raised by other noble Lords. It should be noted that the amendment presents two clear and perverse opportunities to avoid paying CIL, which I am sure is not something that the noble Lord wants. First, there are no specified limits on the minimal amount of infrastructure that a building must house if it is not to become liable for CIL. That is because ““infrastructure”” in the amendment is not tied to the CIL definition of ““infrastructure”” in Clause 215. In the context of the amendment, ““infrastructure”” could have its ordinary meaning and cover things such as pipes. Therefore, it could exclude large numbers of new buildings on the grounds that they contain pipes, ducts or electric cables. Secondly, by providing that only new buildings housing infrastructure will be exempt from paying CIL, rather than allowing for changes to existing buildings housing infrastructure, the amendment risks distorting the behaviour of developers, who might seek to disguise changes to existing buildings as entirely new buildings housing infrastructure and thus not liable to pay. We cannot support the amendment. However, I am aware that, in our conversations about the nature of infrastructure and its impact, the noble Lord made it clear that the amendment on Report was probing and directed at finding what was and was not included in the definition of development liable to pay CIL. On the basis of the question that he raised about the text of the Bill, I think that that is still his intent. To answer the question, I will have to expand the argument a little. Noble Lords are aware that the purpose of CIL is to raise funds to provide infrastructure to support the development of an area. CIL is intended to spread costs of providing such infrastructure more fairly. I remind noble Lords that only 14 per cent of developments contribute to Section 106. As noble Lords will recall, there is a principle of fairness behind the logic. Infrastructure generates impact and costs. I take the point about chicken and egg but I do believe there is an ethical argument that it should contribute to the costs of local and sub-regional infrastructure given these impacts. I give two examples: schools generate huge amounts of road traffic and hospitals generate huge amounts of clinical and other waste. These are demands that those infrastructures can place on other infrastructures. That is why we believe that infrastructure should contribute to those needs because otherwise other development will have to pay higher rates of CIL in the generalised assessment to cover those costs. We have limited the notion of infrastructure. We principally sought to delineate liability in relation to buildings, because buildings by their nature are places where people congregate or travel to and from and they represent the sort of developments that local authorities plan for when considering their infrastructure needs. I know that this is not an entirely straightforward concept—there are powers in Clause 208(2)(a) to deal with difficult cases—but the word ““buildings”” should be interpreted in its ordinary sense. If you look at the Concise Oxford English Dictionary, you see that ““building”” is, "““a permanent fixed structure forming an enclosure and providing protection from the elements etc (e.g. a house, school, factory, or stable)””." Given the impact that such buildings have on local infrastructure, we are right to explore in regulations whether they might contribute to these infrastructure costs through paying CIL. We have always said that exemption from CIL is a matter for regulations. We have not ruled out that there could be an exemption from CIL for infrastructure in addition to what is not covered because it is not a building—we have had some interesting exchanges on wind turbines, for example. However, we do not want to rule things out now on the face of the Bill before we have consulted on them. Any exemptions from CIL need to meet the criteria that we set out in paragraph 4.10 of the August document. I hope that the noble Lord will take some comfort from that. We have to think about things such as warehouses. These have a major impact on transport infrastructure, although in these cases the charging authority might decide to charge different rates of CIL for such developments because they have a different level of impact. On that basis, railway stations and harbour buildings would also be CIL-liable whereas structures such as railway lines and power lines would not. I appreciate that there is a power in Clause 208(2)(b) to cover other structures, but our intention in making regulations would be to cover those structures that are similar to buildings because they might place demands on infrastructure or benefit from it. As we indicated in our August document on CIL, we also intend that some development that might otherwise fall under Clause 208(1) will not be liable to pay CIL. Household developments by home owners are one such example. We also intend to exclude many developments for which planning permission is granted under the GPDO because such development is likely to have minimal impact on local infrastructure. These are complex issues. We have struggled with them at each stage of the Bill. We are pledged to continue to work closely with stakeholders on which development should be liable to pay CIL and which should not. We will certainly consult on the detail. The noble Lord asked about Section 106. We are very aware of the short-term problems in the housing market. The way in which CIL will be assessed will be driven by the development document, which will be a separate document alongside the development plan. It will take into account the various sources that can help to fund the needs that additional housing in particular will make on the local community. Section 106 and CIL will have to be assessed side by side along with the contribution that central government make. As we work through the transition and CIL comes on stream, Section 106 may be scaled back to cover fewer things. We want to discuss that with stakeholders. I know that the Benches opposite have urged caution on Section 106, so we will certainly consult on that. I turn to the question raised by the noble Earl, Lord Caithness. On the Planning-gain Supplement (Preparations) Act 2007, the Minister for Local Government in the other place gave such a commitment, so I hope that that will satisfy him. His second point was about how we will prevent CIL from leaking into the other coffers of local government. As I said, there will be a development plan document. CIL will be extremely specific and will go through a rigorous and transparent process, for the reasons that we have discussed as we have gone through the Bill. However, it will be ring-fenced in general terms and it must be applied to infrastructure. The Bill says: "““CIL regulations must require the authority that charges CIL to apply it … to funding infrastructure””." I hope that that will reassure the noble Earl. My noble friend raised a question about the police. Having been fully prepared at two previous stages of the Bill when he was not able to be in his place, I do not now have the speaking notes with me. I believe that he was asking for reassurances, which I can give him. We are certain that the list is indicative. We are also certain that police infrastructure can receive CIL funding. Guidance will be used to remove any doubt, if doubt remains. Of course, we will have the regulations, on which we shall be able to consult. I hope that that reassures him. My other noble friend asked how much will be raised by CIL. As soon as we get Royal Assent, we shall be putting out a new impact statement, which will update the figures. I think that we will see that CIL is expected to generate hundreds of millions of pounds.