Planning Bill

I am sorry that my noble friend was not here for our debate this morning when we said that CIL would fund everything that is needed by way of infrastructure. All the money that presently goes into infrastructure from central government and various government departments will be there still. CIL will be a local charge to meet local infrastructure needs. I take his point and I am happy to have the debate with him outside the Chamber, but it is a contextual issue he is addressing. We now are talking about specific ways in which the charging schedule will reflect the local needs of the community, but within the context of everything available to fund the infrastructure as well. Amendment No. 438CB would remove the power for the Secretary of State to make regulations about the procedures to be followed by charging authorities in setting CIL rates. To ensure that the charging schedules are prepared and tested to similar standards, we need to be able to set down the processes such as consultation in regulations. Our proposals to place the charging schedule within the LDF and ensure that it is prepared to a similar standard will give the status and connection to the local authority’s development plan that is needed. I therefore would ask the noble Baroness not to press Amendments Nos. 438CA and 438CB. On Amendment No. 438EA, again in the name of the noble Baroness, Lady Valentine, there is widespread agreement, not least this afternoon, that CIL should not choke off development. It is self-evident that the higher the level that CIL is set, the higher the costs of development. The lower the amount that a developer can spend on purchasing land for development, the more likely it is to remain commercially viable, and so on. Ultimately, if the difference between the existing value of the land and the price proposed by a buyer who wishes to develop is too low and the landowner does not sell, we will not get the delivery that we want. As I said earlier, the amendment is prompted by concerns that development viability is articulated in a way that does not capture the essential nature—or sometimes the essential difference—between parts of the industry, which we will discuss later. We remain open to amending the Bill if the right formulation can be found. Amendment No. 438H would add to the list of factors in Clause 201(3) which the CIL regulations may permit or require charging authorities, in setting or revising rates, to consider. The purpose is likely to be that the level of CIL set in a charging schedule is development proceeding. Ensuring that CIL does not stop development proceeding is also behind Amendment No. 444B, although the noble Earl, Lord Caithness, comes at this from a novel direction, which does not surprise me given his ingenuity. His amendment appears to require a charging authority to effectively pay compensation to a developer if CIL prevents development going ahead. His amendment would go too far to achieve what I think that he is after; that is, an incentive to the authority not to set too high a CIL charge. It would involve a detailed case-by-case assessment for each development claiming the compensation, probably by someone independent of the charging authority and developer, of the likely increase in value arising from the planning permission and the financial circumstances of the development to show that it was CIL which was preventing a development proceeding rather than other factors. This would be highly contentious and time consuming, and would encourage perverse behaviour. It might even reward inefficient developers. I hope that the government amendments, particularly Amendment No. 438C, which provides that charging authorities must have regard to the actual or expected increase in value arising from planning permission, clearly demonstrate that we share the concerns of noble Lords to ensure viability. It may help to allay concerns about the effect of CIL if I now turn to government Amendment No. 438J. This alters the extent of the power in Clause 201(5) and provides that the CIL regulations provide, permit or require provision to make differential rates of CIL. It picks up on the point made by my noble friend. These differential rates may now include provision for nil rates of CIL and not simply reductions. We think that it is conceivable that a charging authority, in developing its charging schedule, may conclude that a type or class of development or a particular part of their area—for example, warehousing—might be at the limits of economic viability and unable to sustain a meaningful level of CIL charge. This amendment would allow charging authorities to set a zero rate for that area or class or type of development if they can justify it according to local circumstances. It is not enough that we ensure that charging authorities take account of the right things to have legitimacy. We have to ensure that they are prepared to robust standards. As always, the amendment in the name of the noble Baroness, Lady Hamwee, is well intentioned.