Planning Bill

moved Amendment No. 438R: 438R: Clause 202, page 125, line 44, at beginning insert ““Subject to section (Compensation)(5),”” The noble Lord said: I shall speak to Amendments Nos. 438R, 442B and 442C, which deal with enforcement and compensation. Government Amendment No. 442B provides clarification as to the measures that the Secretary of State may set out in regulations for the purpose of enforcing CIL. First, it clarifies that regulations may provide that any interest, penalty or surcharge payable may be treated as CIL for the purposes of Clauses 202 to 205. Secondly, it limits the penalties or surcharges that can be imposed through regulations to the higher of 30 per cent of the CIL amount or £20,000. Finally, it prevents regulations authorising entry to a private dwelling without a warrant issued by a justice of the peace. Clause 204(3) provides powers to make regulations about the consequences of late payment of CIL or a failure to pay CIL. Such measures may under Clause 204(3)(a) and (b) include interest, surcharges or penalties. However, the Bill does not expressly say how the money received from those might be spent. Clause 202(1) says that CIL regulations must require that CIL is applied, or caused to be applied, by charging authorities to infrastructure, but the argument might go that interest, surcharges and penalties are not CIL but are sums in addition or different from it. The amendment will provide for clarity here. It ensures that we can use our regulation-making powers to ensure that any income must be spent on infrastructure or on administering CIL. It is right that we can ensure that income from interest, penalties and surcharges is spent in these ways, where it can be put to best effect. It is a constituent part of the whole CIL regime. By making a distinction between CIL and interest, penalties and surcharges, we consequently need to be clear that the regulation-making powers on collection and enforcement apply to them. The amendment therefore allows those items to be treated as CIL for the purposes of Clauses 203 and 204. Without clarity, authorities will be unsure whether enforcement-related income ought to fund infrastructure or whether it might be used for some other purpose; for instance, to finance their enforcement procedures. We consider that it is important to have the option to ensure that the money received through enforcement could be channelled to infrastructure delivery, not least because penalties may be proportional to CIL liabilities and therefore potentially quite substantial, exceeding the costs of enforcement activity. Amendment No. 442B also sets two limits to the penalties and surcharges that may be provided for through regulations. The level of the penalty or surcharge may not exceed the higher of the two—30 per cent of any CIL or £20,000. For most cases of persistent non-payment, we intend that charging authorities will be able to impose penalties that are a fixed proportion of the CIL amount due to ensure that the penalty imposed reflects the amount of CIL due. The limit of 30 per cent is informed by the HMRC proposal in a recent consultation as part of the ongoing review of the penalties that taxes unpaid for more than 12 months face penalties of up to 30 per cent of the amount due. For cases of unpaid CIL of less than 12 months, however, we envisage the penalties being less than 30 per cent of the amount due. The monetary limit of £20,000 is to allow regulations to provide for fixed penalties. For example, it is envisaged that charging authorities may be able to serve stop notices requiring development to cease where CIL has not been paid; much as local planning authorities may do where unlawful development takes place. Failure to comply with such a notice would be an offence, but rather than require such breaches to be dealt with by way of criminal proceedings, we have the option to provide for a civil penalty to be payable in substitute to a fine on conviction. Finally, Amendment No. 442B restricts the powers of entry that regulations may set out for the enforcement of CIL. It prevents regulations enabling, for example, charging authorities to enter private dwellings without a warrant from a justice of the peace as a means of enforcing CIL, which helps to ensure that such powers are used proportionately and appropriately. The unrestricted nature of the power currently found in Clause 204(3)(f) was a concern for the Delegated Powers and Regulatory Reform Committee in its 12th report. The amendment seeks to meet that concern and, indeed, the 13th report did not raise this as a concern. The amendment contains a number of sensible provisions providing for certainty and restricting the regulation-making powers on enforcement. Amendments Nos. 442C and 438R relate to the payment of compensation in relation to enforcement action. Amendment No. 442C introduces a new clause to make provision that the CIL regulation may require charging authorities to pay compensation in respect of loss or damage suffered as a result of enforcement action being taken by them. The amendment allows regulations to set out when compensation may be sought, how it may be sought, how much compensation may be paid, and the methodology through which it may be determined. Disputes about compensation may be referred to the lands tribunal. Amendment No. 438R makes a necessary consequential amendment. Under subsection (5) of the new clause, CIL revenues, if regulations allow, may be used to pay this compensation. However, Clause 202(1) stipulates that CIL regulations must require the charging authority to ensure that CIL is spent on funding infrastructure. Amendment No. 438R adds the necessary qualification to take account of the possibility that CIL may be used to pay compensation under the new clause. The appropriate use of CIL enforcement measures could give rise to loss or damage to developers. Inappropriate enforcement could include where CIL liabilities have been paid or are not due, but the charging authority in any event requires a development to cease. This amendment would allow the CIL regulations to cater for such circumstances and offer the possibility of a significant safeguard against the misuse of CIL enforcement actions for the property and development industry. There is a parallel between these provisions and Section 186(2) of the Town and Country Planning Act 1990, which provides for compensation for inappropriately served planning stop notices. These amendments provide safeguards against the misuse of CIL enforcement action. I beg to move.