My Lords, let me conclude this debate by responding to a number of points that have been made, starting with the noble Duke, the Duke of Wellington. I shall not name all noble lords, if your Lordships do not mind, in each response, but those who asked the questions will know who they are, and questions were asked by a number of noble Lords.
I turn first to the question on the views of the OEP. As my right honourable friend the Environment Secretary has set out very clearly in her response to the Office for Environmental Protection, we do not accept that this will lead to regression in environmental outcomes. It is the Government’s judgment that it will not. The reform package will improve the conditions of these habitat sites. The obligations on water companies to upgrade wastewater treatment works in designated catchment areas by 1 April 2030 will far outweigh the nutrients expected from the new housing developments, by putting in place wider upgrades for the long term. These upgrades will benefit existing houses, not just new homes, providing an effective approach to reducing existing wastewater nutrient pollution, not just forestalling the possible future pollution from development. On top of that, we are doubling investment in Natural England’s nutrient mitigation scheme to £280 million, which will be sufficient to offset the very small amount of additional nutrient discharge attributable to the 100,000 homes between now and 2030.
Staying on the OEP, my noble friend Lady McIntosh suggested that the Government broke the law on sewage. We always welcome scrutiny from the OEP, and we are co-operating with it fully to support its work in many areas. The OEP has not concluded that the Government broke the law on combined sewer overflows; it issued an information notice requesting a further response from Defra, Ofwat and the Environment Agency, and is continuing to investigate.
I move on to another issue that the noble Duke, the Duke of Wellington, brought up, as did many other noble Lords: how can we justify asking local authorities to effectively ignore the facts? I dealt with this in my opening speech, but I am going to repeat it.
The assumption we are asking competent authorities to make is reasonable for two reasons. First, this assumption is limited to developments where the wastewater is treated by a wastewater treatment works or a private treatment system regulated under the environmental permitting regulations. This means that nutrients from wastewater will remain subject to the strict legal duties that are binding on water companies and others who operate wastewater treatment systems. These duties are becoming stricter in many affected catchments, thanks to the wastewater treatment work upgrades mandated through the Bill. As I said before, the Government estimate that this will lead to a 69% reduction in phosphorus loads and around a 57% reduction in nitrogen loads in total from wastewater treatment works across all affected catchments, significantly reducing nutrient pollution at source in a principled manner.
Secondly, a package of measures we are putting in place will ensure that we more than offset the additional nutrient flows from new housing. This includes the significant additional investments we are putting into Natural England’s nutrient mitigation scheme. Local authorities will be able to object to planning applications on the basis of nutrient pollution; it is mandatory to consider it. Local planning authorities will still have to consider the impact from nutrient pollution as a material planning consideration, as the amendments made no change to the wider operation of the planning system.
Planning decision-makers will continue to have regard to the national planning policy and material planning considerations, and the Government are clear that the focus of planning decisions should always be on whether the proposed development is an acceptable use of land, rather than the control of processes, where these are subject to separate pollution control regimes. Nutrient pollution from wastewater treatment works is controlled under environmental permits, and planning decisions should assume that these regimes will operate effectively.
Another issue brought up by a number of noble Lords is that the developer should pay. The Government agree. It is essential that housebuilders contribute fairly, and we all agree with the principle that the polluter should pay. We are working with the HBF to structure a fair and appropriate contribution system. My officials are in active discussions with it about the design of these schemes, including considering how they are delivered.
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The noble Baroness, Lady Parminter, brought up an issue with the current mitigation schemes and whether we are undermining their good work, including among the farming community. I do not think that we are. We are doubling the funding available for nutrient reduction schemes today and making clear that we expect contributions from the larger developers. However, the Government are removing the obligation on developers to secure nutrient credits up front on a project-by-project basis because this has caused an unacceptable barrier to development. Our plans will ensure that the new nutrients from development will still be offset while shifting our longer-term focus to restoration. Natural England will now have the funding and certainty to lead this work for the remainder of the decade. We expect that it will seek to partner with third parties to deliver nutrient reductions and associated environmental co-benefits where this represents good value for money.
I move on to the Henry VIII powers. The noble and learned Lord, Lord Hope, asked for an example of how the Secretary of State might use these. It is hoped that the amendments as they stand will be sufficient in ensuring the policy intent of unlocking housing blocked by legacy EU law on nutrient neutrality. However, due to the complex nature of the legislative system in this area, the Government may need to make incidental, consequential and similar provisions to give effect to this policy intent. The power will be used only where necessary to give effect to our policy intent. The Government remain bound by the ambitious, legally binding targets for water quality and biodiversity and will not allow any regression in environmental outcomes through our new approach. The noble Lord, Lord Anderson,
asked whether the Henry VIII powers could reinstate the measures. The Government have specifically constrained the Henry VIII powers so that they are unable to amend Part 6 of the habitats regulations. Therefore, they could reinstate these measures using these powers.
The noble Baroness, Lady Parminter, brought up that 70% of the 100,000 houses already have approved mitigations in place, but that is not the case. As we have heard, in some areas of the country, developers, environmental organisations, local authorities and Natural England have begun to invest in mitigations. However, we have listened to the concerns of local authorities, communities and housebuilders that, while a positive development, mitigation schemes are moving far too slowly, with no guarantee that demand can be met imminently, and estimates carry significant uncertainty given the developing nature of the market and risk of underdelivery. There is no guarantee that demand can be met soon enough to unlock what we consider to be much-needed homes.
The noble Baroness, Lady Jones of Whitchurch, brought up the issue of houses not being delivered all over the country—we were not stopping these houses. I suggest that she listens to Councillor Darren Rodwell, the environmental spokesman for the LGA and a Labour councillor:
“Thousands of new homes are on hold due to river pollution and water level concerns so we are pleased that the Government has acted on our calls for urgent action and funding to address pollution at source. However, short-term local solutions are still needed to address environmental concerns about river pollution. Councils are calling for a doubling down on long-term action to protect rivers by focusing on reducing pollution at source. Councils want to work together with government, agencies, developers and the agricultural sector to find ways to address pollution locally so homes can be built, while doing everything possible to reduce pollution at source and maintain safe water levels”.
I agree with Darren Rodwell, and that is what we are delivering.
I think those were all the main questions. If I have missed anything, I will look in Hansard and write to noble Lords. I will now address the specific amendments.
First, I reassure the noble Baroness, Lady Willis of Summertown, that this upgrade duty will be monitored and enforced effectively. The Government work closely with the water industry regulators to ensure that the water companies are compliant with their statutory duties and bring forward improvements as agreed and set out in the water industry national environment programme. There will be regular liaison between water companies and the Environment Agency to discuss progress and risks throughout the delivery of the programme between 2025 and 2030.
Through this, the Environment Agency will ensure that the water companies deliver the required upgrades to agreed timelines. If this is not the case, the Environment Agency will take all the necessary enforcement action, including through the use of its powers under the environmental damage regulations as amended by this Bill. Together with Ofwat’s established process for ensuring that water companies are adequately funded to deliver on their business plans, these processes will see that the water companies comply with their statutory duties outlined in the Bill. As such, I hope I can reassure the House that this amendment is not necessary.
Turning to the other amendments on this issue, I hope that my explanation has been sufficient to convince my noble friend the Duke of Wellington of the powerful reason for the change that the Government are making. It is absolutely not the case that these changes will result in nutrient pollution, whether from wastewater or any other source, being disregarded. The assumption that we are legislating that the competent authorities must make for the purposes of an HRA for a plan or project is very reasonable in the context of our wider approach.
First, the approach that the Government are taking is narrow, as it relates only to the consideration of nutrients in HRAs and does not seek to amend or change the operation of the material planning considerations in other decisions within the planning system. This means that pollution from development affecting the environment may still be a material planning consideration based on the local circumstances. The drafting carefully reflects the policy intent not to preclude an LPA from considering as a material planning consideration nutrient pollution, ensuring that, where proposed, any step to reduce pollution can still be considered and implemented.
Secondly, these legislative changes are necessary and effective only to remove consideration of nutrients in urban wastewater from the scope of the habitats regulations assessment in designated catchments. It is limited to development where the wastewater is treated by wastewater treatment works or private treatment systems, regulated under the environmental permitting regulations, so it does not apply to agricultural or industrial developments. This means that nutrients from wastewater will remain subject to strict legal duties binding on water companies and others who operate wastewater treatment systems. These duties are becoming stricter in many affected catchments thanks to the wastewater treatment work upgrades mandated through the Bill.
The Government estimate that this will lead to a reduction in phosphorous loads of around 69% and a reduction in nitrogen loads of around 57%, in total, from the wastewater treatment works across all affected catchments—significantly reducing nutrient pollution at source in a principled manner.
Thirdly, alongside these legislative changes, as I have said, we have announced a substantial package of commitments to the environment, including a doubling of the investment in Natural England’s nutrient reduction schemes to expand beyond offsetting pollution and towards restoring sites.
We are working with developers to design a contribution scheme which ensures that homebuilders continue to make a fair and proportionate contribution to this programme. This sits alongside commitments to accelerate work to recover habitat sites in the catchments most impacted by nutrient pollution and with the most acute housing pressures, and to support farmers to manage nutrients more sustainably, including £200 million towards slurry infrastructure and equipment grants and a new £25 million fund to invest in innovative farming technologies to accelerate progress towards a nutrient circular economy.
Finally, I can reassure the noble Duke that the Government did consider a range of possible approaches to this very difficult issue. Given the delays currently
being caused to housing delivery in affected areas, we believe this legal change is the only way to ensure certainty for competent authorities that they can proceed with planning consent. The Government considered a number of options in reaching this conclusion, including issuing guidance about how degradations linked to imperative reasons of overriding public interest—IROPIs—could be applied within the HRA framework. However, this would continue to require lengthy case-by-case considerations and a direct link to be drawn between compensation and individual developments. It would therefore have a limited and still uncertain impact on the Government’s objectives of giving confidence to communities that housing and other development will be possible in the affected areas.
I move on to the amendment tabled by my noble friend Lord Caithness. The Government are seeking a power to guard against unintended consequences and to ensure a functioning statute book. Therefore, it is not appropriate to limit the scope of the power to just social housing delivery. We are very clear that it is not a problem specific to social housing. There is a critical need for housing of all tenures in this country. We do not see any justification to restrict our intervention in this way, particularly as we are clear that we are implementing sufficient measures to fully offset any nutrient impacts from changes to the habitats regulations.
I turn finally to the amendment tabled by the noble Baroness, Lady Hayman of Ullock. While I fully understand the intent behind the noble Baroness’s proposal, we have already outlined the urgency of need for these interventions. The Government believe action is needed now to get on with housebuilding. Our plan would do that while protecting the environment. What is being proposed instead amounts to dithering and delay—and adds confusion rather than clarity.
I am afraid that the party opposite is planning to vote down laws that would unlock 100,000 new homes and enhance the environment. It has ignored the pleas of its own council leaders and the entire development industry, including social housing builders, to back government plans. This is the sort of short-term political manoeuvring that does nothing to benefit the British people and everything to undermine public confidence in us as politicians and our Parliament. What it is proposing will end the dream of home ownership for thousands of families and block an £18 billion boost to our economy. Let us be clear: many small businesses up and down this country need these changes—if not, they will go out of business. The party opposite talks the talk on housebuilding but this is the first opportunity to walk the walk. I ask noble Lords not to back the blockers but back the builders.
The amendments in my name seek to remove what is an unavoidably burdensome process that is a major barrier to house delivery across around 14% of England’s entire land area. They deal with nutrient neutrality not with a sticking plaster but at source. I urge this House to support them when they are moved.
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