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BRIEFING PAPER

Number 07562, 11 May 2016

Housing and Planning Bill: Lords amendments and Ping Pong

By Wendy Wilson Louise Smith

Inside: 1. Starter Homes 2. Rogue landlords 3. Recovering abandoned

premises 4. Vacant high value local

authority housing 5. Rents for high income social

housing tenants 6. Reducing regulation of social

housing 7. Phasing out security of tenure

for social housing tenants 8. Leaseholders’ rights 9. Letting agents: client money

protection 10. Planning in England 11. Compulsory Purchase 12. Carbon compliance standard

for new homes

Number 07562, 11 May 2016 2

Contents Summary 4

1. Starter Homes 7 Amendments made in Committee 7 Amendments made at Report Stage 7 Consideration of Lords amendments (3 May 2016) 8 House of Lords: Commons amendments and reasons (4 May 2016) 9 Consideration of Lords message (9 May 2016) 9 House of Lords: Commons reasons and amendments (10 May 2016) 10

2. Rogue landlords 12 Amendments made in Committee 12 Amendments made at Report Stage 12 Amendments made at Third Reading 13

3. Recovering abandoned premises 14 Amendments made at Report Stage 14

4. Vacant high value local authority housing 15 Amendments made at Report Stage 15 Amendments made at Third Reading 17 Consideration of Lords amendments (3 May 2016) 18 House of Lords: Commons amendments and reasons (4 May 2016) 19 Consideration of Lords message (9 May 2016) 19 House of Lords: Commons reasons and amendments (10 May 2016) 20 Consideration of Lords message (11 May 2016) 22 House of Lords: Commons reasons (11 May 2016) 22

5. Rents for high income social housing tenants 23 Amendments made at Report Stage 23 Amendments made at Third Reading 24 Consideration of Lords amendments 24 House of Lords: Commons amendments and reasons 25

6. Reducing regulation of social housing 26 Amendments made in Committee 26 Amendments made a Report Stage 26

7. Phasing out security of tenure for social housing tenants 27 Amendments made at Report Stage 27 Amendments made at Third Reading 28

8. Leaseholders’ rights 29 Amendments made at Report Stage 29

9. Letting agents: client money protection 30 Amendments made at Report Stage 30

10. Planning in England 31 10.1 Amendments made at Report Stage 31

Contributing Authors: Wendy Wilson, housing, sections 1-9 Louise Smith, planning, sections 10-12

Cover page image copyright: Louise Smith

3 Housing and Planning Bill: Lords amendments and Ping Pong

Neighbourhood right of appeal 31 Local Plans 32 Permission in Principle 32 Planning freedoms 34 Affordable housing contributions in small scale developments 34 Sustainable drainage systems 35 Processing of planning applications by alternative providers 36 Establishment of Urban Development Corporations and New Town Development Corporations 37

10.2 Amendments made at Third Reading 38 Duration of Permission in Principle 38 Planning freedoms 38

10.3 Consideration of Lords amendments (3 May 2016) 38 10.4 House of Lords: Commons amendments and reasons (4 May 2016) 39 10.5 Consideration of Lords message (9 May 2016) 40

House of Lords: Commons reasons and amendments (10 May 2016) 40

11. Compulsory Purchase 42 Amendments made at Report Stage 42 Amendments made at Third Reading 44

12. Carbon compliance standard for new homes 45 Consideration of Lords amendments (3 May 2016) 46 House of Lords: Commons amendments and reasons (4 May 2016) 46 Consideration of Lords message (9 May 2016) 46 House of Lords: Commons reasons and amendments (10 May 2016) 46

Number 07562, 11 May 2016 4

Summary The Housing and Planning Bill 2015-16 was considered in committee in the House of Lords during nine sittings between 9 February and 23 February 2016. It was considered on Report over five days between 11 April and 25 April 2016. Third Reading took place on 27 April 2016.

Full background on the Bill, and its provisions as originally presented, can be found in Library Briefing Paper 7331, Housing and Planning Bill 2015-16. A further Library Briefing Paper 7398, Housing and Planning Bill: Report on Committee Stage, summarises the Bill’s progress in Public Bill Committee in the House of Commons.

This briefing paper provides information on amendments made to the Bill during its progress through the House of Lords. The paper has been updated to include a summary of consideration of Lords amendments by the House of Commons on 3 May 2016, Lords consideration of Commons amendments and reasons on 4 May 2016 , consideration of Lords message on 9 May 2016, consideration of Commons reasons and amendments on 10 May, consideration of Lords message on 11 May and, finally, consideration of Commons reasons on 11 May.

The purpose of the Bill

On publication, the Government said the Bill would kick-start a “national crusade to get 1 million homes built by 2020” and transform “generation rent into generation buy.” The supply-side measures in the Bill are primarily focused on speeding up the planning system with the aim of delivering more housing. There is also a clear focus on home ownership, with measures to facilitate the building of Starter Homes; self/custom build housing; and the extension of the Right to Buy to housing association tenants following a voluntary agreement with the National Housing Federation (NHF). Other measures in the Bill are aimed at tackling “rogue” landlords.

Scrutiny in the House of Lords

Throughout the Bill’s progress in the House of Lords Peers have criticised the lack of detail on key areas, such as the definition of high (now higher) value vacant council housing and the requirement on local authorities to make a payment to the Secretary of State in connection with increased rental income chargeable to certain high income tenants. The Government’s intention is that the detail will be provided in regulations. Peers have argued that the “skeleton” nature of the Bill has impaired their ability to give it proper scrutiny. The contents of the Bill have drawn the attention of the Delegated Powers and Regulatory Reform Committee. The Committee’s 20th, 21st, 26th, 27th and 28th Reports of 2015-16 included recommendations on the Bill’s delegated powers. The Committee expressed concern over the “variable quality” of the Department’s original delegated powers memoranda; said the Government had failed to provide the Committee with timely information on amendments affecting certain delegated powers in the Bill; and expressed disappointment in several areas where the Government rejected the Committee’s recommendations.

Lords Amendments

Some of the housing measures in the Bill were substantially amended on Report with further amendments at Third Reading. Several non-Government amendments and new clauses were added, including:

• a requirement that the 20% discount on Starter Homes be repaid over a period of 20 years (reduced by 1% for each year of occupation);

5 Housing and Planning Bill: Lords amendments and Ping Pong

• a provision to give local authorities the power to determine the proportion of Starter Homes to be built on any particular development;

• provisions to require determinations (in respect of higher value vacant council housing) affecting more than one local authority to be subject to the affirmative resolution procedure, and also to make the definition of higher value housing subject to parliamentary approval;

• provision to enable local authorities, where they can demonstrate a need, to retain receipts from council house sales to fund the provision of a property of similar type to the one sold;

• provision to give local authorities discretion over the levels of rent they would want to charge tenants with high incomes;

• provision to limit rent increases for higher income tenants to no more than 10p for each pound of income above the minimum income threshold (the Government is seeking to apply a taper rate of 20p in the pound); and

• provision to set the minimum income thresholds for ‘pay to stay’ at £50,000 in London and £40,000 outside of London (the Government is seeking to set the minimum thresholds at £31,000 and £40,000 respectively).

Government amendments included:

• a provision putting on the face of the Bill a requirement to ensure that where the Government make an agreement with a local authority outside London about building new homes, at least one new affordable home is provided for each dwelling that is assumed to be sold;

• provision to allow regulations to exempt households in receipt of Housing Benefit and Universal Credit from the ‘pay to stay’ policy; and

• provision to enable local authorities to grant longer-term tenancies of up to 10 years in certain circumstances with potential for longer tenancies for families with children.

In relation to the part of the Bill on planning in England, a number of non-Government amendments and new clauses were added. These related to:

• a new clause providing for a neighbourhood right of appeal; • an amendment to restrict permission in principle to housing-led developments only; • provision to allow local authorities to require section 106 affordable housing

contributions from certain small-scale developments; and • a new clause to incentivise the use of Sustainable Drainage Systems (SuDS) by

ending the automatic right to connect to conventional drainage. At both Report stage and Third Reading a number of Government and Government-supported amendments were made on the planning provisions, which included: • provision to enable the Secretary of State to prepare a local plan for a local planning

authority and to direct that it is brought into effect; • explicitly excluding fracking development from being capable of being granted

permission in principle; • putting on the face of the Bill the qualifying documents capable of granting

permission in principle and setting a duration for it; • enabling local planning authorities to revoke or to modify permission in principle

granted; • a new clause to allow the Secretary of State to grant planning freedoms to local

authorities to facilitate new housing; • making clearer on the face of the Bill the Government’s intentions in its pilot

schemes for competition in the processing of planning applications.

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A new non-Government clause was also added on Report introducing a “carbon compliance standard for new homes”. This would require the Government to put in place regulations for a carbon compliance standard for new homes built from 1 April 2018.

Ping Pong

When the Bill returned to the House of Commons on 3 May 2016 the Government sought to reject a number of the Lords amendments, particularly those relating to Starter Homes; the sale of vacant higher-value council homes; higher rents for high income tenants; the neighbourhood right of appeal; affordable housing contributions; sustainable drainage systems; and carbon compliance.

On 4 May the House of Lords agreed to the majority of the changes made in the House of Commons but agreed to press for further amendments in respect of Starter Homes; higher-value council homes; and the neighbourhood right of appeal. The Lords also agreed to insist on its amendments in respect of sustainable drainage systems and carbon compliance.

The Commons considered the Bill again on 9 May. Lords amendments were again rejected but Government amendments in lieu were agreed to place a statutory duty on the Government to undertake a review of energy standards in new homes, and to require a review of the effectiveness of policy and legislation on sustainable drainage.

The Bill returned to the House of Lords on 10 May. The Government amendments were accepted and no further Lords amendments were agreed aside from a further amendment concerning the sale of higher-value council homes which was pressed, successfully, to a vote by Lord Kerslake (Crossbench Peer).

The Commons considered and rejected Lord Kerslake’s amendment, following a division, on 11 May. The Bill then returned to the House of Lords for the final time where Lord Kerslake agreed not to insist on his amendment.

7 Housing and Planning Bill: Lords amendments and Ping Pong

1. Starter Homes Part 1 of the Bill (clauses 1-7) puts a general duty on all planning authorities to promote the supply of Starter Homes. It also provides a specific duty, which will be set out in regulations, to require a certain number or proportion of Starter Homes on site.1 A Starter Home is defined as a new-build property which will be sold to a first-time buyer under the age of 40 at a discount of 20% off the market price. The homes will be subject to price caps of £250,000 outside of Greater London and £450,000 in Greater London. Many of the powers in this part of the Bill are to be set out in regulations to be published at a later date.

Amendments made in Committee Parliamentary Under-Secretary of State for Communities and Local Government, Baroness Williams of Trafford, moved a series of amendments to clause 2 (42A, 44A, 44B, and 45B) to allow what she described as “some modest flexibility” on the under-40 age cap. The Secretary of State would be enabled to make regulations, subject to the affirmative resolution procedure, to exempt the under-40 age cap for specified categories of people. The Baroness referred to a Starter Home being bought by joint purchasers, both of whom are not under 40 years of age.

Amendment 45A would require the Secretary of State to consult local authorities, the Mayor of London and other appropriate persons before amending the price cap for Starter Homes.

Amendment 45B would allow regulations made under clause 2 to amend the Starter Homes chapter. The Baroness said this could, for example, create a list of different categories of people to whom the age cap does not apply.

The Baroness said that amendment 42A was a technical amendment.2

The amendments were agreed without a division.

Amendments made at Report Stage Amendment 1 moved by Lord Best (Crossbench Peer) to clause 2 of the Bill, which defines a Starter Home, was agreed to on division (275 votes to 181).3 Lord Best said the amendment would “moderate the generosity of the starter homes package.”4 It would require the repayment of the 20% discount reduced by 1% for each year of occupation for a period of 20 years.

The Government’s initial intention was that the 20% discount would not be repayable if the owner sold after the expiry of five years. In March 2016 the Government published Starter homes regulations:

1 Starter homes regulations: technical consultation, March 2016, suggests that local

authorities will be required to ensure that 20% of the homes delivered on a new site are Starter Homes.

2 HL Deb 3 March 2016 cc968-9 3 HL Deb 11 April 2016 c12 4 HL Deb 11 April 2016 c15

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technical consultation in which views are being sought (up to 18 May) on a different approach:

We would now like views on whether the existing approach should be refined – to allow the proportion of market value the individual is able to realise on sale to increase gradually with the number of years they have lived in the property before the restriction is completely lifted.

The Government is seeking views on a tapered approach which enables the starter home to be sold at an increasing proportion of market value, stepping up to 100% over time.5

The consultation document states that the Government would not seek to extend the period within which some discount is repayable beyond 8 years on the grounds that “this would unreasonably limit people’s ability to move on.”6

Government amendments 2 and 3 to clause 2 were agreed without division. These amendments require qualifying first-time buyers of Starter Homes to have reached a minimum age of 23. Baroness Williams said this “would prevent individuals purchasing a starter home in the name of a child or perhaps a student under the age of 23.”7

Lord Kerslake (Crossbench Peer) moved amendment 8 and consequential amendment 9 to clause 4 of the Bill (Planning permission: provision of starter homes) to:

…place the responsibility for determining the proportion of starter homes in any particular development where it should properly lie: with the local planning authority.8

The House divided on the amendment 8; it was agreed by 280 votes to 194. Amendment 9 was also agreed.

Consideration of Lords amendments (3 May 2016) The House of Commons disagreed with the Lord Best’s amendment 1 to clause 2 and substituted it with Government amendments (a), (b) and (c) to “provide a power to implement a tapered approach to resale.”9 The Minister, Brandon Lewis, said:

Our amendments provide for the Secretary of State to make regulations on the length of the taper period, and on the details of how the taper will operate. That will enable us to ensure that it is effective and delivers for people in the real world. The amendments set out two potential models for its operation. For example, when a starter home is sold, the first-time buyer must, if there is discount to be returned, pay a proportion of that discount to a specified party. That is the broad approach suggested in the other place, and I can see the logic of it. A body such as the Homes and Communities Agency could then use those funds to build more affordable homes.

As part of our consultation on starter homes regulations, we are seeking the views of developers, lenders and local authorities on

5 DCLG, Starter homes regulations: technical consultation, March 2016, p8 6 Ibid., p9 7 HL Deb 11 April 2016 c31 8 HL Deb 11 April 2016 c38 9 HC Deb 3 May 2016 c62

9 Housing and Planning Bill: Lords amendments and Ping Pong

how the taper would operate. We strongly believe that we should settle the matter through engagement with the sector, rather than placing the detail of restrictions in legislation. I am confident that that is the best way for us to meet our manifesto commitment on starter homes.10

The Commons also rejected Lord Kerslake’s amendments 8 and 9 to clause 4. The Minister said:

We are absolutely determined to deliver the number of starter homes that we promised, in order to help first-time buyers, who were the worst-hit part of the homebuying sector in Labour’s great recession. However, in passing Lords amendments 8 and 9, the other place is seeking to stop us. This House should not stand for that. Those amendments would remove from the Bill the power to set a national starter homes requirement on housing sites. The other place has proposed to replace that power with a locally set requirement that would be effective only when local authorities had completed studies of local housing need and viability.11

The Commons divided on the motion to disagree with amendment 9; the motion was agreed by 287 votes to 172 (279 to 158 for constituencies in England).12

Government amendments in lieu of Lords amendments 9 and 10 were agreed to give councils local discretion over whether to require the development of Starter Homes on rural exception sites.13

House of Lords: Commons amendments and reasons (4 May 2016) The Lords agreed with the Government’s proposition not to insist on amendment 1 and to the Government’s amendments to provide a power to implement a tapered approach to resale of Starter Homes. The Lords also agreed with the Government amendment to give authorities discretion over the development of Starter Homes on rural exception sites (amendment 10A).14 However, the Lords divided on a further amendment to 10A, moved by Lord Kerslake, to give local authorities the opportunity, where they can demonstrate a need, to meet all of the Starter Homes requirement through alternative forms of affordable home ownership. This amendment was agreed to by 272 votes to 212.15

Consideration of Lords message (9 May 2016) The House of Commons considered Lords amendment 10B which would have given local authorities discretion to meet the Starter Homes requirement on a site with alternative forms of affordable home ownership where a need can be demonstrated. The Minister, Brandon

10 HC Deb 3 May 2016 c63 11 HC Deb 3 May 2016 c65 12 Because the motion related exclusively to England a double majority was required. 13 HC Deb 3 May 2016 cc65-66 14 HL Deb 4 May 2016 cc1438 15 HL Deb 4 May 2016 cc1439

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Lewis, said the amendment “would again totally undermine our manifesto commitment to build 200,000 starter homes by 2020.”16

He said that authorities will be required to ensure that 20% of new homes on a site are Starter Homes:

We will have a requirement for 20% starter homes, but what the local authorities do beyond that will be a matter for them.17

Lords amendment 10B was defeated on a division by 289 votes to 206 (273 to 176 in respect of constituencies in England).18

House of Lords: Commons reasons and amendments (10 May 2016) Baroness Williams of Trafford asked the House of Lords not to insist on its amendment 10B on the basis that it would undermine the Government’s manifesto commitment to deliver 200,000 Starter Homes by 2020.19

Lord Kerslake, in moving Motion A1 (to insist on amendment 10B), again asked the House to consider “a more localist approach.” He said:

The issues with this have been previously rehearsed, and there are three major concerns. First, it imposes a single, top-down requirement regardless of local circumstances. Secondly, it does so with a product that is still in design and is not tried and tested. Thirdly, the percentage proposed will squeeze out other kinds of affordable housing that are desperately needed. My amendment is not intended to be, nor is it a wrecking amendment to the manifesto. It seeks only to give greater local flexibility where a need can be demonstrated and to allow other types of low-cost home ownership products to be counted within the starter homes requirement. It will be for individual local authorities to take a view on this within their overall duty to promote starter homes. There need be no delay in getting starter homes going.

Indeed, I think that local planning decisions will be quicker as a result of this flexibility. The low-cost home ownership delivered could quite reasonably count against the Government’s 200,000 target. They can, as new low-cost home ownership products, be targeted at the same group of people—young first-time buyers— whom the Government are seeking to help. From the point of view of the buyer, what matters is the opportunity to own their own home.

Before we lock ourselves into a rigid, inflexible, national solution that risks setting local authorities up to fail, I ask Ministers and this House, even at this very late stage, to consider a more localist, market-responsive approach. I beg to move.20

Baroness Williams, in response, highlighted the constitutional issues raised by Motion A1:

This House has done its duty. It has scrutinised, and the Government have revised as far as they possibly can. It is time to stop and to recognise and respect the will of the electorate and the primacy of a manifesto mandate. The noble Baroness, Lady

16 HC Deb 9 May 2016 c459 17 HC Deb 9 May 2016 c460 18 HC Deb 9 May 2016 cc473-6 19 HL Deb 10 May 2016 c1678 20 HL Deb 10 May 2016 cc1679-80

11 Housing and Planning Bill: Lords amendments and Ping Pong

Hollis, said that the legislation had been rushed through and that the Commons had not scrutinised it properly. However, I understand from the Commons that timings were agreed, including by the Labour Whips. I have already made clear to the House that Amendment 10B would fundamentally change the Government’s manifesto intention as proposed in the Bill, and that we therefore consider the Salisbury convention to be engaged.21

She also emphasised ongoing consultation and said that the Starter Home percentage requirement was still subject to this consultation:

The noble Lord, Lord Kerslake, said that the percentage requirement was set at 20%. Twenty per cent is currently a consultation proposal and is not yet fixed. However, we are consulting the sector on this and other aspects of the starter home regulations. The noble Lord also talked about current proposals being rigid and inflexible. We are consulting on how the starter homes requirement will apply. This includes setting out exceptions on the basis of viability and the types of housing being built, such as housing for older people.22

Lord Kerslake agreed “reluctantly” to withdraw Motion A1.

21 HL Deb 10 May 2016 cc1683 22 HL Deb 10 May 2016 cc1683-4

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2. Rogue landlords Part 2 of the Bill introduces new financial sanctions for use against rogue landlords who break the law; enables local authorities to identify rogue landlords within their areas and place them on a database; and provides a regime for removing the worst offenders from the sector through banning orders. Part 5 of the Bill also contains measures aimed at tackling poor practice and standards in the private rented sector.

Amendments made in Committee Government amendments 3 and 4 to clause 20 of the Bill (offence of breach of banning order) were agreed. The amendments provide that a person convicted of a breaching a banning order, who continues to breach the order after conviction, will commit a further offence and be liable to a fine not exceeding one-tenth of level 2 on the standard scales for each day or part of a day on which the breach occurs. This equates to up to £50 per day until the breach ends.23 A defence of reasonable excuse was also added in relation to this further offence.

Government amendments 5, 6 and 8 to clause 22 (financial penalty for breach of a banning order) provide that a person who has had a civil penalty imposed for breach of a banning order instead of prosecution who continues to breach the order, can have an additional civil penalty imposed of up to £30,000 for each period of six months or part six-month period during which the breach continues.24

Baroness Williams of Trafford said the amendments send out “the strong message that a breach of a banning order will not be tolerated and will ensure that the business model of rogue landlords is disrupted.”25

Government amendment 16 to clause 38 (use of information in database) was agreed. Baroness Williams explained the purpose of the amendment:

Amendment 16 would mean that for the purposes of paragraph 17 of Schedule 23 to the Finance Act 2011, the database will be treated as being maintained by the Secretary of State, although Clause 27 sets out that local authorities have responsibility for maintaining its content. This will ensure that HMRC is able to access the database, using its powers under the Finance Act 2011, so that it can use the data in discharge of its tax functions when dealing with rogue landlords and property agents.26

Amendments made at Report Stage Government amendments 14 and 16 to 19, moved by Baroness Evans of Bowes Park, were agreed to replace “company” with “body corporate” in clauses 13 and 17 of the Bill. The Baroness said:

23 HL Deb 9 February 2016 cc2156-7 24 HL Deb 9 February 2016 cc2157 25 Ibid. 26 HL deb 9 February 2016 c2167

13 Housing and Planning Bill: Lords amendments and Ping Pong

The amendments ensure consistency in the terminology used in this part of the Bill and that any incorporated body, not just a company, which commits a banning order offence can be subject to a banning order.27

A consequential amendment (31) to clause 54 (interpretation of Part 2) was agreed to clarify that “the banning order provisions extend to companies and other bodies registered abroad.”28

Government amendment 133 provides for regulations specifying banning order offences to be approved through the affirmative resolution procedure, thereby ensuring an opportunity for both Houses to scrutinise the provisions.

Government amendment 20 to clause 22 (Financial penalty for breach of a banning order) provides that a local authority must apply the criminal standard of proof, and thus be satisfied beyond reasonable doubt that the offence complained of has been committed. Guidance on the imposition of financial penalties by local authorities will be issued.29

Government amendment 21 to Schedule 1 of the Bill provides that First-tier Tribunals, when considering appeals against the imposition of financial penalties, must consider the decision afresh:

The tribunal, therefore, does not review the authority’s decision and decide whether it is reasonable but must instead re-determine the case itself, applying the criminal standard of proof on the facts known to it.30

Government amendment 29 introduces a new clause providing that an appeal to the Upper Tribunal cannot be made unless permission is granted either by the First-tier Tribunal or the Upper Tribunal. Appeals will not be limited to establishing a point of law.31

Amendments made at Third Reading Lord Younger of Leckie, moved what he described as a “minor and technical” Government amendment to clause 54 (meaning of property manager and related expressions). He said the amendment would ensure that clause 54 would not apply to individuals engaged in property management work under a contract of employment.32 This gave rise to questions from Peers who asked whether the amendment would result in directors of companies being excluded from responsibility which might lead to a banning order. Lord Younger gave a commitment to provide a full written response.33 Amendment 1 was agreed without division.

27 HL Deb 11 April 2016 c76 28 Ibid. 29 HL Deb 11 April 2016 c77 30 Ibid. 31 HL Deb 11 April 2016 c78 32 HL Deb 27 April 2016 c1144 33 HL Deb 27 April 2016 c1146

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3. Recovering abandoned premises

Part 3 of the Bill makes provision for private landlords to recover abandoned premises.

No amendments to these provisions were made in committee.

Amendments made at Report Stage Baroness Grender (Liberal Democrat) moved amendments 39 and 41 to 50 to clauses 55, 57, 59 and 60 which she described as being “designed to ensure that vulnerable tenants are protected under this new legislation on abandonment.”34

She went on:

The amendments would ensure that, in addition to contacting the tenant, where there was a person, a charity or a housing authority that had paid or contributed to the deposit, they would be contacted, too. So the amendments are aimed in particular at those tenants who are vulnerable and already known to charities or local authorities. This is critical because, as we all know—especially those of us who have debated the Bill for several hours—the end of a private tenancy is now the most common cause of statutory homelessness, accounting for 31% of all households accepted as homeless in England and 42% in London.35

Baroness Evans of Bowes Park said that the Government welcomed and supported the amendments.36 They were agreed without division.

34 HL Deb 13 April 2016 c263 35 Ibid. 36 HL Deb 13 April 2016 c266

15 Housing and Planning Bill: Lords amendments and Ping Pong

4. Vacant high value local authority housing

The Bill does not provide for the extension of a statutory Right to Buy to housing association tenants. A voluntary deal agreed between the National Housing Federation and the Government means that the RTB will be extended to these tenants on a non-statutory basis. Work to develop the scheme is underway. However, the Bill does make provision for grants to be paid to housing associations to cover the cost of selling their housing assets at a discount. These grants will be financed through the sale of vacant high value local authority housing stock.

No amendments to these provisions were made in committee.

Amendments made at Report Stage Lord Lisvane (Crossbench Peer) moved amendment 53 to clause 67 (payments to the Secretary of State) to require any determination made by the Secretary of State to be made through regulations. He said:

Taken together with Amendment 132, any determination that affected more than one authority would be subject to the affirmative procedure. Amendment 132 would additionally apply the affirmative procedure to regulations that contained more than one determination. It would also make the definition of high-value—or higher-value—housing subject to parliamentary approval.37

In moving the amendment Lord Lisvane made reference to the Delegated Powers and Regulatory Reform Committee’s conclusion in its 20th Report of 2015-16, that it was:

…inappropriate to delegate to the Secretary of State a power to determine the amount of the payment to be made by local housing authorities without any form of Parliamentary scrutiny, particularly in view of the paucity of detail on the face of the Bill to guide how the power is to be exercised.38

Baroness Williams of Trafford set out the Government’s position:

Our view is that the determination is the most appropriate way of setting out the information of what payment a local authority will make to the Secretary of State. The key elements of the calculation are set out in the Bill, including the housing to be taken into account and the definition of vacancy. Other elements, such as the definition of high value and the types of properties which are to be excluded will be set out in regulations and therefore subject to further parliamentary scrutiny. Indeed, my announcement that the definition of high value is to be made through an affirmative procedure has, I hope, demonstrated my willingness to listen to the House. As I explained in my response to the committee, we also think that the nature and amount of information contained in the determination means that it is appropriate to use a determination rather than a statutory instrument. The determination will contain the formula, the underlying assumptions and the payment for each authority, as

37 HL Deb 13 April 2016 c280 38 Ibid.

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the noble Lord pointed out, but it will also include the figures to determine the payments for each of the 165 local authorities, including, among other things, each authority’s vacancy rate, the number of its high-value properties and the level of its attributable debt.

Such a large and complex set of data creates the potential for errors to creep in, which will be noticed only by the relevant local authority. We therefore want to ensure that there is flexibility to amend the determination very quickly to correct any such errors. We of course welcome scrutiny of the formula and other elements of the determination. That is why Clause 69(2) requires the Government to consult all affected authorities, the LGA and relevant professional bodies before making a determination. On this basis, and with the amendment that I have announced on high-value regulations, I urge the noble Lord to withdraw the amendment.39

Lord Lisvane pressed amendment 53 to a vote; it was agreed by 279 votes to 203.

Baroness Williams moved Government amendment 54 to clause 67 (payments to the Secretary of State) to base the payments on the market value of the authority’s interest in ‘higher’ value housing rather than ‘high’ value housing.40 She explained the reasoning behind the amendment:

We recognise that in areas of highest housing pressure, such as the inner London boroughs, the provisions could apply to a high number of dwellings. If we choose to look at high value for each region, the same issue would apply to those areas within a region which experience a high level of housing demand in comparison with their neighbours. For example, places such as Harrogate, Oxford and Cambridge could all have a high proportion of their stock defined as high value.

We have therefore brought forward a significant amendment to redefine “high value” as “higher value”—a small linguistic change but one with profound legislative impact. I hope that these amendments will reassure those noble Lords who have expressed concern that some authorities could have all their housing stock defined as high value. The amendments are intrinsically linked to furthering our commitments on the one-for-one and for a package to deliver the homes that we all agree we need.

By making this change to the definition we could set a threshold for a local authority as a proportion of that local authority’s housing stock which would define “higher value” in an authority-specific manner. In this way, “higher value” could be defined in relation to a local authority’s own homes. For example, within an inner London borough only a proportion of its homes could be defined as higher value, even if all houses of any type in the borough were objectively high value when compared with national or regional house prices. Again, I hope that these amendments will reassure noble Lords who expressed concern that some authorities could have all their housing stock defined as high value.41

39 HL Deb 13 April 2016 c283 40 HL Deb 13 April 2016 c287 41 HL Deb 13 April 2016 c290

17 Housing and Planning Bill: Lords amendments and Ping Pong

Other Government amendments were made to replace all references to ‘high value’ throughout the chapter. Baroness Williams explained the purpose of other Government amendments to this part of the Bill:

Amendment 60 would make express provision to ensure that “higher value” represented a localist approach, as it could be defined differently for different local authorities and different types of housing, as well as for different geographical areas, as is currently provided for in Clause 67(9). Linked to this, Amendment 61 gives the Secretary of State the ability to define higher value by using any class of housing as a comparator and makes clear that other appropriate factors may be taken into account when setting that definition.

Amendment 66 involves a minor drafting change. It makes no changes of substance but simply provides greater clarity to the provisions dealing with agreements. Government Amendments 58 and 71 are small drafting changes which clarify that this higher value definition is in relation to housing. These amendments, if accepted, will enable the Government to define higher value in regulations in the best way possible having carefully considered local authority data.42

The Baroness confirmed that regulations made under this part would provide for homes in areas of outstanding natural beauty and national parks to be excluded when calculating the payment due from local authorities to the Secretary of State.43

The Government amendments were agreed without division.

Amendments made at Third Reading Baroness Williams moved Government amendment 2 to clause 73 of the Bill (reduction of payment by agreement). She said the amendment “provides the assurance that this House has been seeking that, where the Government make an agreement with a local authority outside London about building new homes, at least one new affordable home is provided for each dwelling that is assumed to be sold.”44

The Baroness went on to say that it is the Government’s intention to give local authorities with particular housing needs the opportunity to reach bespoke agreements about the delivery of different types of new homes in their areas. However, she said she “was not able to return with a government amendment on this element at this stage.”45

In speaking to amendment 2, the Baroness confirmed that the Government “will consider other rural areas when making exclusions in regulations to the housing to be considered for payment in respect of higher-value vacant housing.”46 Amendment 2 and consequential amendments 4, 5 and 7, were agreed without division.

Lord Kerslake (Crossbench Peer) moved amendment 6 to clause 73 to provide that where a local authority can demonstrate need, “it would

42 Ibid. 43 HL Deb 13 April 2016 c289 44 HL Deb 27 April 2016 c1147 45 HL Deb 27 April 2016 c1148 46 Ibid.

Number 07562, 11 May 2016 18

be able to retain from the council house sale receipts the funding necessary to reprovide a house of a similar type to the one it had sold.”47

This amendment was agreed on a division by 275 votes to 197.

Consideration of Lords amendments (3 May 2016) The Minister, Brandon Lewis, set out the Government’s reasons for disagreeing with Lord Lisvane’s and Lord Kerslake’s amendments:

We remain convinced that the determination is the most appropriate way of setting out the information about the payment a local authority will be expected to make to the Secretary of State in respect of its higher-value housing. The key elements that will determine how much an authority will be expected to pay are set out on the face of the Bill. That includes the housing to be taken into account and the definition of vacancy.

[…]

I want to be clear with the House once again. In the other place, the Opposition were clear that they did not press the clauses enabling the voluntary right to buy to a vote and acknowledged our mandate for funding it. However, amendments 37 and 184 would seriously hamper our ability to implement it and so should be returned straightaway. The same applies to amendment 47, which is extremely restrictive and would prevent the Government from considering whether local authorities can actually deliver the required housing. We want to ensure that the Government can enter into agreements with local authorities about their local needs. By focusing solely on social housing, the amendment would prevent the agreement process from recognising that flexibility will be needed to respond to the country’s diverse housing needs—we have already heard from hon. Friends about the different needs in different places this afternoon—and that other types of housing may better meet local housing need.48

The Commons disagreed with Lord Lisvane’s amendment (now 37) to require any determination made by the Secretary of State to be made through regulations without a division.49 The Commons divided over Lords amendment 47:

If a local housing authority so wishes, and that authority can demonstrate, whether by reference to its local housing plan or otherwise, that there is a need in its area for social housing of the kind that it proposes to build, the Secretary of State shall enter into an agreement with that authority whereby it shall retain such part of the payment as may be required to fund the provision of a new dwelling to be let as social housing on terms (as to tenure, rent or otherwise) which are similar to those on which the old dwelling was let.50

Lords amendment 47 was rejected by 288 votes to 172 (279 to 158 for constituencies in England).51 Lords amendment 184 agreed to as amended by Government amendment 184A to provide that the

47 HL Deb 27 April 2016 c1151 48 HC Deb 3 May 2016 c66 49 HC Deb 3 May 2016 c112 50 Commons reasons and amendments – HL Bill 87 51 HC Deb 3 May 2016 c112

19 Housing and Planning Bill: Lords amendments and Ping Pong

definition of higher-value should be subject to the affirmative resolution procedure.

House of Lords: Commons amendments and reasons (4 May 2016) Lord Kerslake moved further amendments under Motion D1:

The first part of the Motion, Amendment 47B, is new and simply confirms that, where a local authority enters into an agreement with the Secretary of State on the one-for-one replacement of a vacant council property that has been sold off, it will be able to retain the funding needed to build a new affordable home. An affordable home would, under the Government’s definition, encompass social rented, affordable rented, shared ownership and, indeed, starter homes. It would be for the local authority to decide whether it wished to enter into an agreement with the Secretary of State and, under this amendment, for the Secretary of State to agree whether they wish to do this—no restriction on either side. If it does so, the local authority will be required to replace one property sold with one new one, which was a welcome addition during the debate on the Bill. However, it will also be for the local authority to consider whether the new affordable property is for rent or for sale, based on the assessment of local needs. The amendment puts beyond doubt in the Bill that the local authority will be able to retain the funding required to deliver this replacement. As such, it is entirely consistent with the Government’s manifesto and I hope, therefore, that the Minister can readily accept it.

Amendment 47C builds on this issue and seeks to put beyond doubt that, where a local authority can make the case—this is in addition to the Secretary of State—on the basis of its particular needs, it will specifically be able to fund the provision of the new dwelling as social housing on a like-for-like basis. Again, the choice is there for the local authority to make its case to the Secretary of State and it is for the Secretary of State to take a view on that case. If they both conclude that there is already sufficient social rented housing in the area, the local authority can choose to build affordable housing for sale or affordable rented housing at a higher level of rent. However, if they conclude that they want to replace with a social rented property, the local authority can make the case on the grounds of its particular need and this amendment will give it the opportunity to do so.52

The Lords agreed Motion D1 on a division by 275 votes to 219.53

Consideration of Lords message (9 May 2016) The House of Commons considered Lords amendments 47B and 47C, the aims of which are set out in the previous section (above). The Minister, Brandon Lewis, argued that these amendments engage financial privilege and said:

…the other place has again tried to block the Government’s ability to negotiate agreements with councils that will deliver value for money for the taxpayer and ensure that housing is delivered, requiring the Government to enter into agreements even where the local authorities have no acceptable plans or track record of delivery. Their proposals would also significantly reduce

52 HL Deb 4 May 2016 cc1444-5 53 HL Deb 4 May 2016 c1453

Number 07562, 11 May 2016 20

the funding available for the voluntary right to buy, again preventing this Government from fulfilling their manifesto commitment. Let me be very clear: this is a wrecking amendment.

I have already said that we will give local authorities with particular needs the opportunity to reach bespoke agreements where they can demonstrate a need, plans that offer good value for money and a strong track record of housing delivery. We need new homes to be built in this country, and we need local authorities working with us to ensure that the right mix of housing is delivered as quickly and efficiently as possible. These amendments would not help to deliver that; in fact, they would hinder it.54

Lords amendments 47B and 47C were defeated on a division by 291 votes to 203 (275 to 174 in respect of English constituencies).55

House of Lords: Commons reasons and amendments (10 May 2016) Baroness Williams of Trafford asked the House of Lords not to insist on amendments 47B and 47C citing financial privilege as the reason:

Noble Lords have used their scrutiny role to great effect. The House has helped to improve the Bill in many ways. However, we cannot accept amending the Bill in a way that would prevent us delivering on our manifesto commitment. As the Minister for Housing and Planning explained in the Commons yesterday, the Government could not accept Lords Amendments 47B and 47C because they would significantly reduce the funding available for the voluntary right to buy. The other place has been clear that it does not agree with the fundamental changes that have been proposed to the agreements process. Twice it has emphatically rejected amendments from your Lordships’ House—by 288 votes to 172 last Tuesday, and then, yesterday, by 291 votes to 203. That shows their strength of feeling.

In addition, the House of Commons has, for a second time, offered a financial privilege reason for rejecting our amendments on this issue. I respect, and would defend, the right of this House to propose an amendment in lieu when the Commons has rejected our original amendment on grounds of financial privilege. However, I remind noble Lords that the Joint Committee on Conventions reported in 2006 that:

“If the Commons have disagreed to Lords Amendments on grounds of financial privilege, it is contrary to convention for the Lords to send back Amendments in lieu which clearly invite the same response”.56

Lord Kerslake moved Motion B1 to propose amendment 47E in lieu of amendments 47B and 47C. He described the purpose of the amendment:

My Lords, Amendment 47E seeks to do two things. First, it seeks to put it beyond doubt that sufficient funding will be available to local authorities to deliver at least one new affordable home for each higher-value property sold; in London this will be at least two for one. Secondly, it gives a local authority the opportunity,

54 HC Deb 9 May 2016 c461 55 HC Deb 9 May 2016 cc476-80 56 HL Deb 10 May 2016 c1684

21 Housing and Planning Bill: Lords amendments and Ping Pong

where it can demonstrate a need for social rented housing in its area, to make the case for the Secretary of State to consider.57

He said he would not have brought the amendment forward unless he thought it was “a matter of vital importance” and said that because the Secretary of State would a have choice over whether or not to consider a local authority’s case for the development of social rented housing, this addressed the question of financial implications.58

Baroness Williams said amendment 47E was not acceptable to the Government:

It would require that, when the Secretary of State enters into an agreement, sufficient funding must be provided to fully fund the cost of the new home. I hope that noble Lords will not misinterpret me when I say that the Government want more housing to be built, and I hope that the noble Lord will recognise that the arguments that this House recognised in relation to the last group apply just as strongly now. We have listened, and I have reassured this House strongly on how flexible agreements will be. It is now time to stop undermining our ability to proceed and to let us deliver our manifesto commitments.

We support the involvement of local authorities in delivering new homes. We value the creative partnerships across the sector to increase housing supply. But additional homes should not be funded simply through retained payments from the sale of high-value vacant housing. We have discussed that at length throughout the course of the Bill. There should be opportunities for local authorities to contribute their land, assets or funding, and to work in partnership with other providers in their area to build homes. We also want to ensure that value for money is secured, and ensure that the homes are delivered as cost effectively as possible.

In placing expectations on receipts, the amendment would prevent the Government from fulfilling their manifesto commitment, because it would significantly reduce the funding available for the voluntary right to buy. Since November last year, more than 29,000 housing association tenants have asked to be kept up to date with the right-to-buy scheme via our website. It is not right that we should deny these tenants their dream of home ownership.59

Lord Kerslake pressed Motion B1 to a division, in doing so he said:

Let me explain my underpinning dilemma here. We have two manifesto commitments. The one that the noble Lord, Lord Shipley, spoke about is the commitment to fund the replacement of a property sold. The other, to which the Minister alluded, is the manifesto commitment to fund the extension of right to buy. As we all sit here now, we do not know whether those two commitments stand together. Quite extraordinarily, during the whole passage of the Bill we have still not been able to answer that question.

This leaves us with a real dilemma. I should say that before I was a Sir Humphrey, I was an accountant. I would not employ me as an accountant now, but that is what my past was, and one of the

57 HL Deb 10 May 2016 c1686 58 HL Deb 10 May 2016 c1686 59 HL Deb 10 May 2016 cc1695-6

Number 07562, 11 May 2016 22

things that I like to see is the numbers adding up. We are now faced with a real dilemma in this situation about a proposal that simply does not enable two contradictory things to happen. So the judgment we have to make is where we place the positioning of the amendment in relation to that. It remains my very strong view that what I have put forward here simply seeks to say that if you reach an agreement on one-for-one replacement—not like-for-like but one-for-one—it is not unreasonable to say that the funding should be there. I am perfectly comfortable with a range of funding being brought in to do more, but at a core level it should do what it says on the tin: fund a replacement.

The second part of my amendment simply says: give consideration to social rented housing. It is hard to see how anyone could see that as objectionable in any part of this House or the other place. So, having agonised and listened through this debate very carefully, I have very reluctantly concluded that I would like to test the opinion of the House on this issue.60

Motion B1 was agreed to on a division by 256 votes to 245.

Consideration of Lords message (11 May 2016) The Minister, Brandon Lewis, asked the House to reject Lords amendment 47E. He said 47E was a wrecking amendment and that it would reduce the Government’s ability to achieve its manifesto commitment of funding discounts to enable housing association tenants to buy their rented homes. He said that the House of Lords approach to this matter, which the Speaker had certified as subject to financial privilege, called into question constitutional issues.

The House of Commons rejected amendment 47E by 292 votes to 197 (275 to 166 in respect of English constituencies61).62

House of Lords: Commons reasons (11 May 2016) Baroness Williams of Trafford moved Motion A which asked the Lords not to insist on amendment 47E with which the Commons had disagreed on the grounds that it engaged financial privilege.

Lord Kerslake agreed not to insist on amendment 47E. The House of Lords agreed Motion A without a division.63

60 HL Deb 10 May 2016 cc1697-8 61 177 votes were originally reported but a correction was reported to the House later

on 11 May. 62 HC Deb 11 May 2016 63 HL Deb 11 May 2016

23 Housing and Planning Bill: Lords amendments and Ping Pong

5. Rents for high income social housing tenants

The Bill will place a mandatory requirement on local authority landlords to charge certain ‘high income’ tenants a higher rent level. Housing associations will have discretion over whether or not to implement this policy.

No amendments to these provisions were made in committee.

Amendments made at Report Stage Lord Kennedy of Southwark, for Labour, moved amendment 72 to clause 78 of the Bill (mandatory rents for high income local authority tenants) to “give local authorities discretion about the levels of rent they would want to charge tenants who found themselves in this difficult situation.”64 Baroness Williams described it as a “wrecking amendment.”65 The amendment was agreed to on division by 240 votes to 176.

Lord Best (Crossbench Peer) moved amendment 73 to clause 78 to limit rent increases to no more than 10p for each pound of a tenant’s income above the minimum income threshold.”66 Prior to the debate Baroness Williams had issued a letter setting out the Government’s intention to set the income thresholds at £31,000 for those outside of Greater London and £40,000 within Greater London. The letter also said that the Government was proposing a taper of 20% so that for every additional pound earned over the income threshold, tenants would pay an extra 20p in rent. She confirmed this position during the debate at Report Stage.67 Lord Best argued for a lower taper rate in order to reduce work disincentives:

The amendment before us proposes a limit on the surcharge of 10p in the pound. Frankly, that is tough enough. Government does not want to pitch the figure so high that it creates work disincentives. The couple in, say, Brighton, each earning under £20,000 a year, would need to weigh up whether one of them should stop working one day a week if they would lose 20p in the pound as the rental surcharge on top of income tax and national insurance contributions, along with a day’s childcare costs and fares to and from work. At least a levy of 10% of earnings over the line would halve that work disincentive. Telling these households to move out and buy elsewhere may be of little help. Their income may not be secure; a big enough mortgage and a necessary deposit may not be within their reach, even with the Government’s generous subsidies for buyers.68

Lord Best’s amendment was agreed to on division by 281 votes to 179.

64 HL Deb 18 April 2016 c445 65 HL Deb 18 April 2016 c451 66 HL Deb 18 April 2016 c456 67 HL Deb 18 April 2016 c470 68 HL Deb 18 April 2016 c458

Number 07562, 11 May 2016 24

Baroness Williams said that Government amendment 133 would provide for regulations made under this part to be subject to the affirmative resolution procedure.69 In addition to confirming the thresholds of £31,000 and £40,000 and the Government’s position on the taper rate, she said:

• No household in receipt of Universal Credit or Housing Benefit would be subject to the policy.70

• Income would be defined as “taxable income” which would take account of employment earnings, pension income and investment income but not Child Benefit, Disability Living Allowance or Tax Credits.71

• A household would be defined as the tenant, any joint tenants and their spouses, partners or civil partners. Within a household only the incomes of the two highest earners would count. The incomes of non-dependent children would not count unless they are on the tenancy agreement and they are one of the two highest earners.72

• In the first year of operation local authorities will return the actual amount of money raised through the policy to the Government – there will be no formula. The issue will be returned to after the first year “when more information is available.”73

The Baroness moved Government amendment 73A to clause 78 to allow regulations to exempt households in receipt of Housing Benefit and Universal Credit.74 The amendment was agreed without division.

Lord Kerslake (Crossbench Peer) moved amendment 76 to clause 79 (meaning of high income) to increase the minimum income thresholds to £50,000 in London and £40,000 outside of London. The amendment was agreed on division by 266 votes to 175.75

Amendments made at Third Reading Lord Beecham, for Labour, moved amendment 8 to clause 80 of the Bill (meaning of ‘high income’ etc) to provide for a triennial review of the income thresholds against movements in the Consumer Price Index.76 The amendment was agreed on division by 253 votes to 201.

Consideration of Lords amendments The Commons disagreed with Lords amendments to the ‘pay to stay’ provisions in the Bill. The House divided over Lord Kennedy’s amendment (amendment 54) to make the charging of higher rents discretionary for local authorities. The amendment was disagreed to by 286 votes to 171 (278 to 157 for constituencies in England).77

69 HL Deb 18 April 2016 c452 70 HL Deb 18 April 2016 c470 71 Ibid. 72 HL Deb 18 April 2016 c471 73 Ibid. 74 HL Deb 18 April 2016 c472 75 HL Deb 18 April 2016 cc480-81 76 HL Deb 27 April 2016 c1166 77 HC Deb 3 May 2016 c115

25 Housing and Planning Bill: Lords amendments and Ping Pong

House of Lords: Commons amendments and reasons Baroness Williams moved Motions E, F, G and H to provide that the Lords would not insist on their amendments to this part of the Bill but in doing so she said that a standard taper rate of 15% would apply to all incomes above the threshold.78 She also made a commitment to review and uprate the thresholds each year in line with the Consumer Price Index – this will be included in regulations.79

Motions E, F, G and H were agreed to without division.

78 HL Deb 4 May 2016 c1458 79 HL Deb 4 May 2016 c1459

Number 07562, 11 May 2016 26

6. Reducing regulation of social housing

Amendments made in Committee Viscount Younger of Leckie moved Government amendments 82BZA and 82BZB to Schedule 4 of the Bill. He described the amendments as technical and said:

This is a consequential amendment relating to the abolition of the disposal proceeds fund, which is one of the deregulatory measures in the Bill. Certain properties developed with public funding are subject to the statutory right to acquire. This consequential amendment maintains that position by defining public funds without referencing the disposal proceeds fund. These amendments to Schedule 4 will ensure that that is the case. As I said, this is a technical amendment resulting from the concerns of the Office for National Statistics about public sector control over housing associations and the deregulatory measures being introduced to address those concerns. I beg to move.80

The amendments were agreed without division.

Amendments made a Report Stage Viscount Younger of Leckie moved a raft of Government amendments, including new clauses, to support the reclassification of housing associations back into the private sector.81

• Amendment 78A has introduced a new clause under which the Secretary of State will be able to make regulations relating to local authorities’ ability to nominate housing association board members and act as shareholders.82

• Amendment 133B provides that these regulations will be subject to the affirmative resolution procedure.83

• Amendments 78B to 78YW to chapter 5 of Part 3 of the Bill (insolvency of registered providers of social housing) to amend the housing administration regime which is used when a large or complex housing association becomes insolvent.84

The amendments were agreed without division.

80 HL Deb 14 March 2016 c1699 81 Towards the end of 2015 the Office for National Statistics classified housing

associations as public bodies in the national accounts. 82 HL Deb 18 April 2016 cc488-9 83 HL Deb 18 April 2016 cc490 84 HL Deb 18 April 2016 cc493-500

27 Housing and Planning Bill: Lords amendments and Ping Pong

7. Phasing out security of tenure for social housing tenants

The Coalition Government legislated (Localism Act 2011) to give social landlords discretion to offer flexible tenancies with a minimum fixed- term of at least two years.85 During the final day of consideration in Public Bill Committee, the Government amended the Housing and Planning Bill to make the offer of a fixed-term tenancy mandatory for local authorities, with some limited exceptions. At that point it was proposed that the maximum fixed-term would be 5 years.

No amendments to these provisions were made in committee.

Amendments made at Report Stage Baroness Evans of Bowes Park moved several Government amendments to this part of the Bill:

• Amendments 79A, 80AA, 81ZB, 81ZC, 81ZD and 81ZE were described as technical amendments intended to help local authorities implement the provisions in Schedules 7 and 8. In particular, amendment 79A is aimed at ensuring that a landlord can terminate a new fixed-term tenancy during the fixed-term on the statutory fault grounds without needing to take additional action to forfeit the tenancy.86 Amendments 80AA, 81ZB, 81ZC and 81ZE “enable local authorities to continue to include provision for forfeiture to cover the situation where a tenancy is no longer secure”87 (e.g. where the tenant is no longer living there as their main home). In these circumstances the statutory possession grounds are unavailable. Amendment 81ZD relates to the rules on succession to a tenancy.88

• Amendment 81ZA has introduced a new clause in relation to mutual exchanges. The Localism Act 2011 is amended to remove the right of existing “lifetime” tenants of local authorities to be given a new lifetime tenancy when they agree to a mutual exchange. Instead, social landlords will have discretion over whether to offer a new lifetime tenancy. Amendment 80ZA has amended Schedule 7 to allow local authorities to continue grant lifetime tenancies where lifetime tenants mutually exchange.89

The Baroness said that the Government had recognised “the strength of feeling on this issue” and announced that amendments would be brought forward to extend the maximum tenancy period to 10 years in certain circumstances ”and to enable local authorities to give longer tenancies to cover the time that children are in school.” She also said she would meet the concerns raised in relation to domestic violence cases through regulations.90

85 For more information see Library Briefing Paper 7173: Flexible and Fixed-term

Tenancies for Social Housing Tenants in England 86 HL Deb 18 April 2016 c509 87 HL Deb 18 April 2016 c510 88 Ibid. 89 HL Deb 18 April 2016 c511 90 HL Deb 18 April 2016 c509

Number 07562, 11 May 2016 28

Amendments made at Third Reading Baroness Evans of Bowes Park moved Government amendments 16 to 32 to Schedule 7 of the Bill (secure tenancies etc: phasing out of tenancies for life) to fulfil the commitment made on Report to enable local authorities to grant longer-term tenancies in certain circumstances. She described the effect of the amendments:

These amendments will give local authorities discretion to offer tenancies of up to 10 years in length, and potentially longer for families with children, to which I shall return. The amendments include a power for the Government to issue statutory guidance to which local authorities must have regard. This means there will be clear expectations on what the local authority should consider when making these decisions, and they can be held to account if they fail to follow the guidance. We will use the guidance to set out the circumstances in which we expect local authorities to issue shorter-term tenancies and the circumstances in which they may exercise their discretion to offer longer-term tenancies. This will enable councils to consider appropriate provision for households where there is someone with a disability or a long-term illness, older people, and those who provide long-term care for a person in this situation. This will help local authorities to get the best use out of accommodation which has been adapted and give those with longer-term needs a sense of stability. We will work with local authorities in developing the guidance and we will ensure that noble Lords have an opportunity to consider it before it is finalised.

As I have said, the amendments also enable local authorities to grant tenancies to cover the period that a child is in school. We have listened carefully to the debate on this issue. We absolutely agree that it is important that children are brought up in a stable environment and recognise that frequent moves can be disruptive to a child’s education. To keep this relatively simple for local authorities, the amendment provides that where a local authority is notified that a child lives in the household, they may provide a tenancy with a fixed term that lasts until the child turns 19. This will allow local authorities to ensure that the relevant child has completed secondary education.

The amendments also make consequential changes to allow landlords to continue to operate an introductory tenancy regime in relation to longer fixed-term tenancies and make necessary changes to the legislation governing demoted tenancies and family intervention tenancies to deliver the policy.91

The amendments were agreed without division.

There has been some immediate comment on the provision of fixed-term tenancies for longer than 7 years which has raised the question of whether these tenancies will have to be registered with the Land Registry. This would ordinarily be the case unless they are defined as a ‘relevant social tenancy’ for the purposes of section 27 of the Land Registration Act 2002.92

91 HL Deb 27 April 2016 c1175 92 Nearly Legal: Housing Law news and comment, Not thinking things through,

27 April 2016 [accessed on 27 April 2016]

29 Housing and Planning Bill: Lords amendments and Ping Pong

8. Leaseholders’ rights Amendments made at Report Stage Lord Young of Cookham (Conservative) moved amendment 99ZA to insert a new clause into the Bill the purpose of which is to add a new section into the Landlord and Tenant Act 1985.93 He said the section would address the difficulties faced by long leaseholders when seeking recognition of tenants’ associations:

It has become apparent that tenants’ associations are finding it increasingly difficult to attain the number of members they need before they can apply for statutory recognition. This is because of difficulties in contacting absent leaseholders: that is, leaseholders who are not resident in a block—for example, buy-to-let investors. The amendment addresses that problem by requiring a landlord to supply to the secretary of a tenants’ association information which would allow contact to be made with absent leaseholders for the purpose of increasing the association’s membership and thereby its chances of obtaining recognition. That needs to be subject to the leaseholders’ consent to comply with data protection.94

Lord Young also moved amendments 99A and 138B:

Amendment 99A seeks to address an irregularity concerning consideration of the recovery of a landlord’s costs from leaseholders as administrative charges. As noble Lords heard in Committee, at present, where a lease allows a landlord to recover the costs of legal proceedings through the service charge, a court or tribunal can decide to restrict the amount that can be recovered in that way. Courts or tribunals do not have similar powers where recovery of the costs of proceedings as an administrative charge is permitted by the lease. This can lead to unfairness, as the leaseholder will have no choice but to pay the cost of proceedings as an administration charge, regardless of the proceedings. Arguably, this discourages leaseholders from exercising their right to challenge the amount of a service charge, particularly as landlords’ costs in those proceedings could well exceed the amount in dispute.

The amendment would enable the tribunal or court to consider, on application, whether it is reasonable for a landlord to recover all or part of the costs. That is not to say that a landlord should not be able to recover the costs, but, rather, that the tribunal or court should be able to consider whether it is reasonable for them to do so. I am sure that noble Lords will agree that such an irregularity should be corrected. Amendment 138B simply brings these two amendments into force. I beg to move.95

Viscount Younger of Leckie, for the Government, welcomed the amendments and they were agreed without division.

93 HL Deb 20 April 2016 c638 94 HL Deb 20 April 2016 c639 95 HL Deb 20 April 2016 c640

Number 07562, 11 May 2016 30

9. Letting agents: client money protection

Amendments made at Report Stage Baroness Hayter of Kentish Town (Labour) moved amendments 99B, 99C and 99D to insert new clauses into the Bill which would enable the Secretary of State to make regulations (subject to the affirmative resolution procedure) to require letting agents and property management agents to belong to a client money protection scheme and to provide an enforcement mechanism.96

Lord Palmer of Childs Hill, who had put his name to the amendments, set out why rent money paid to an agent needs to be protected:

Some 80% of the lettings agency sector—these are the figures used by the Minister—have client money protection. The new amendment and the original amendment are for the 20% who put tenants and landlords at risk. If a letting agent goes bust or goes walkabout in a liquidation, tenants’ money held and the rights of landlords and tenants are at the bottom of the creditors’ queue in a liquidation or bankruptcy.

[…]

Perhaps the best way of illustrating the need for this amendment is by telling horror stories, of which there are many. This month, it was reported that a company called Whitefield Properties took rental money due to landlords and tenants’ deposits over a four-year period. The money was paid into the firm’s bank account and was, perhaps carelessly, not protected. It was reported that £123,000 of customers’ money went missing. The Staffordshire firm, with branches in Milton, Leek and Crewe, went into administration in 2014. If we were still arguing for this amendment, I would give many more examples to try to make my case.97

The amendments were agreed to without division.

96 HL Deb 20 April 2016 cc641-6 97 HL Deb 20 April 2016 cc643

31 Housing and Planning Bill: Lords amendments and Ping Pong

10. Planning in England Part 6 of the Bill contains a number of different reforms to the planning system, with the aim of speeding it up and to enable it to deliver more housing.

On 18 February 2016 and while the Bill was progressing through its stages in the Lords, the Government published an Implementation of planning changes: technical consultation, which closed for comment on 15 April 2016. The consultation provided further information about how certain aspects of the Bill would work. These included:

• Proposals that for the small sites register, small sites should be between one and four plots in size and that sites should just be entered on the small sites register when a local authority is aware of them without any need for a suitability assessment.

• Further information about how the Secretary of State would set time limits in relation to neighbourhood planning functions.

• Information about how and when the Government would intervene in the local plan making process.

• Information about the qualifying documents that would be capable of granting planning permission in principle.

• Information about the evidence base to be used to compile local authority registers of brownfield land, about how sites would be assessed for inclusion on the register and about how authorities would be incentivised to make progress on meeting the Government’s brownfield objective for 90% of suitable brownfield sites have planning permission for housing by 2020.

• Information about the thresholds proposed for when a local authority would be designated for poor performance in relation to non-major planning applications.

• Information about a proposed dispute mechanism for section 106 negotiations.

• It also sought views on who should be able to compete for the processing of planning applications, which applications could they compete for and on how fee setting in competition test areas should operate.

None of the planning in England clauses in this part were amended at Committee stage in the Lords. There were a number of both Government and non-Government amendments and new clauses inserted at Report Stage. Government amendments only were made to this part at Third Reading.

10.1 Amendments made at Report Stage Neighbourhood right of appeal Liberal Democrat Peer, Baroness Parminter, moved amendment 102ZA which would insert a new clause into the Bill to introduce a neighbourhood right of appeal.98 This is intended to be a limited right only for parish councils and neighbourhood forums, not for individuals. It would enable them to appeal against the granting of permission only 98 HL Deb 20 April 2016 c656

Number 07562, 11 May 2016 32

for new housing that conflicts with their made or well-advanced neighbourhood plan. The aim is to give greater redress to people who have gone through the neighbourhood plan making process.99

Speaking for the Government, Baroness Evans of Bowes Park said that she could not accept the amendment because communities already have the chance to be involved in the planning process; that they can be involved in local and neighbourhood plan making and make representations on planning applications.100 She said set out that a community right of appeal would create delays and uncertainty in the planning process which would discourage people from getting involved.101

Baroness Parminter said that there was a “real need now for this limited right of appeal just for parish councils and neighbourhood forums”, and pressed the amendment to a division; it was agreed by 251 votes to 194.102

Local Plans Viscount Younger of Leckie moved Government amendment 102A to enable the Secretary of State to prepare a local development scheme for a local planning authority and to direct an authority to bring that scheme into effect. He explained that the aim was to:

ensure that where an authority has failed to set out publicly its intention to produce a local plan and indeed a timetable for doing so, we can take action and provide certainty for all communities that a plan for their area will be prepared and that they will have an opportunity to get involved in the plan-making process.103

Liberal Democrat Peer, Lord Stunell raised concern that this would be “an anti-localism process which will lead to local authorities losing control of the planning process which is at the heart of the localism agenda.”104 The Minister replied that the power was intended to be a last resort and that local authorities had already had a long time in which to make a local plan.105

The amendment was agreed without division. Government technical amendment 102B was also agreed.106

Permission in Principle Restriction to housing-led development

Labour Peer, Lord Beecham moved amendment 102C with the intention of making it clear that permission in principle was to be only for housing-led development.107 He said that this was to hold the

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33 Housing and Planning Bill: Lords amendments and Ping Pong

Government “to their originally declared policy, which they appear to have changed.”108

Parliamentary Under-Secretary of State for Communities and Local Government, Baroness Williams of Trafford, confirmed that it was already the Government’s intention to limit permission in principle to housing-led development, which would be specified in secondary legislation. Putting it in secondary legislation would give the Government more flexibility in the future.109

The amendment was pressed to a division and was agreed by 213 votes to 171.110

Exclusion of fracking development

Baroness Williams moved Government amendment 103 to make clear that development consisting of the “winning and working of minerals”, which would include fracking development, would not be capable of being granted permission in principle.111 The amendment was agreed without division.112

Documents to grant permission in principle

Government amendments 104, 105 and 106 were also moved to put on the face of the Bill the qualifying documents capable of granting permission in principle. The specific documents are:

“a register maintained … under section 14A of the Planning and Compulsory Purchase Act 2004”,

introduced by Clause 137 of this Bill;

“a development plan document within the meaning of Part 2 of the 2004 Act … a neighbourhood development plan”.113

The amendments were agreed without division.114

Revocation and modification

Labour Peer, Baroness Andrews, moved amendments 107ZA to 107ZD, intended to strengthen the permission in principle system and to give greater protection to the historic environment in the process.115 The amendments would enable local planning authorities to revoke or to modify the permission in principle granted by local plans or registers, where they consider it expedient to do so. Amendment 107ZD would also allow for compensation arrangements to be set out in secondary legislation. The amendments are intended to extend the existing provisions that local authorities have to revoke or modify planning permissions to permission in principle. Baroness Williams highlighted how the Government had worked together with Baroness Andrews on

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these amendments and said that she strongly supported their inclusion in the Bill.116 The amendments were agreed without division.117

Planning freedoms Conservative Peer Lord Lucas moved amendment 107B to insert a new clause designed to improve scope for local initiative in the planning system.118 It would allow the Secretary of State to make regulations to grant, in certain circumstances and where requested by a local authority, “planning freedoms”. Planning freedoms are defined in the amendment as “a scheme that disapplies or modifies specified planning provisions in order to facilitate an increase in the amount of housing in the planning area concerned.”119

Baroness Williams of Trafford said that the Government was willing to accept the amendment on the following basis:

My noble friend has made it clear that his amendment is simply enabling. If a clear case could be made for the circumstances where these measures might apply, such circumstances would need to be set out in regulations which would have to be debated in both Houses. On that basis, and with those checks and balances in place, I am willing to accept the amendment at this stage, but subject to considering further whether any technical adjustments are needed for the remaining stage of the Bill.120

The amendment was agreed without division.121

Affordable housing contributions in small scale developments Labour Peer Baroness Royall of Blaisdon moved amendment 119 to set out in legislation that local authorities could require affordable housing contributions in relation to the following developments:

—(a) developments of 10 units or less, and developments which have a maximum combined gross floorspace of no more than 1000sqm (gross internal area), and(b) developments in a rural area or an area where—(i) planning permission for the site was granted wholly or partly on the basis of a policy for the provision of housing on rural exception sites;(ii) the site is in a national park or an area with equal protection to that of a national park; or(iii) the site is in an area designated under section 82 of the Countryside and Rights of Way Act 2000 (designation of areas) as an area of outstanding natural beauty.122

Baroness Royall said that as most residential development in rural areas was on sites of 10 units or fewer, the ability to seek affordable housing contributions on site, or as a commuted sum from these sites, was critical. She also said she not understand why the Government had reintroduced restrictions in clause 143, that had previously been overturned by judicial review, that would mean that local planning

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35 Housing and Planning Bill: Lords amendments and Ping Pong

authorities could not seek affordable housing for sites of fewer than 10 units.123

Responding for the Government, Baroness Williams said that clause 143 aimed to allow for a more consistent approach to how Section 106 agreements could be used in relation to affordable housing provision. “This could include conditions on how planning obligations are sought for affordable housing. These can be varied by the type of site to which they apply.” She said that measures implementing this power would be set out in regulations subject to the affirmative resolution procedure, “so noble Lords will have further opportunity for scrutiny.”124

The amendment was pressed to a division where it was agreed by 269 votes to 185.125

Sustainable drainage systems Liberal Democrat Peer Baroness Parminter moved amendment 119A to insert a new clause into the Bill designed to “ensure that 1 million new homes are built with sustainable drainage systems, or SuDS, helping to protect homeowners against flooding and delivering wider environmental benefits.”126 She set out concern that the Government was not monitoring the quality of SuDS being introduced by developers, how often SuDS were included in new developments, nor how often viability was cited by developers as a reason for not including them. The amendment would end the automatic right to connect to conventional drainage. It would mean that connection would be the last resort when all other sustainable drainage options had been excluded. It would apply to all sites, including small sites “of which there are around 100,000 approved applications a year and which impact significantly on the flood risk to others.”127

In response, Baroness Williams set out the Government’s commitment to do further work in this area:

I can confirm that, in response to the amendment, we commit to undertaking a full review on the strengthened planning policy on sustainable drainage systems by April 2017. I can also confirm that we will take action to make changes, including closely examining the need for any legislative measures, if evidence shows that the strengthened policy is failing to deliver. I am keen that the review is informed by a wide range of experiences and hope that noble friends and members of the Adaptation Sub-Committee will play an active part in taking it and any recommendations forward. Officials are developing a plan to identify what further work is needed to improve our evidence on the effectiveness of the policy, including the take-up of sustainable drainage systems in new development. They will welcome the opportunity to work with stakeholders on this.128

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Baroness Parminter said that although she appreciated the steps taken by the Minister, she did not believe “that the option of a possibility of legislation, following a review that we knew was going to happen anyway, is enough for an issue considered so serious by this House.”129 She therefore “reluctantly” pressed the amendment to a division where it was agreed by 253 votes to 188.130

Processing of planning applications by alternative providers Baroness Evans of Bowes Park moved Government amendment 120A.131 It relates to clauses added at Commons Report stage of the Bill which give the Secretary of State the power, by regulations, to introduce pilot schemes for competition in the processing (but not the determining) of applications for planning permission.132 Baroness Evans set out how the amendment would do three things:

Amendment 120A does three things. First, as recommended by the DPRRC [Delegated Powers and Regulatory Reform Committee], it confirms that the purpose of the clauses is to enable pilots in discrete areas to test the benefits of introducing competition to planning application processing. Secondly, it addresses another committee recommendation by setting the maximum length of pilot schemes. Discussions with local authorities and professional bodies have suggested that a maximum period of five years is prudent to allow for lengthy applications to go through the whole process, including appeals if necessary. Thirdly, local authorities have said the pilots will not be a level playing field if designated persons only process planning applications attracting a fee and local authorities are left to do the other applications connected to the development of the sites, as those connected applications tend to attract little or no fee.133

Government amendments 121A, 121B, 121D, 121F, 122B, 122C, 123A, 123C and 123F make consequential changes to enable connected applications to be processed by designated persons.134

Baroness Evans also explained a number of further amendments in relation to this provision:

Amendment 121C prevents us including in regulations anything that allows or could allow an authority’s decision-making function to be carried out by a designated person. It also puts beyond doubt that any advice, report or recommendation from a designated person will not be binding on the authority responsible for determining a planning application. To support this, Amendment 123D removes Clause 146(2)(g), which was of particular concern to noble Lords in Committee.

Noble Lords wanted more detail about how the pilots would operate and, ideally, to see draft regulations. It is essential that the pilots are designed with local government and professional bodies. We have started an extensive dialogue with planning professionals that has already involved over a hundred local

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authorities. None the less, I want to respond to noble Lords’ concerns, so Amendment 121C also places a duty on the Secretary of State to consult before making the first regulations to implement pilot schemes. Combined with other amendments, this means that your Lordships’ House will be able to debate the detail of how the pilot schemes will operate after it has been co-designed and consulted on with local government.

Amendment 121 implements a recommendation from the DPRRC that the Secretary of State should be under a duty to bring back to Parliament an evaluation of the pilots and set out any conclusions that can be drawn from them.135

Amendments 120A, 121 to 121B, 121C, 121D, 121F, 122B, 122C, 123A, 123C, 123D, and 123F were all agreed without division.136

Establishment of Urban Development Corporations and New Town Development Corporations Government amendments 127 and 128 aim to ensure that the affirmative procedure will continue to apply to statutory instruments creating urban development corporations (UDC) and urban development areas (UDA), as recommended by the Delegated Powers and Regulatory Reform Committee.137 The amendments also ensure that the affirmative orders establishing these bodies should “be expressly not hybrid.”138 Speaking for the Government, Baroness Williams of Trafford explained why:

We do not consider that a right to petition, which can significantly delay the creation of the UDC and the UDA, should be retained in light of the new statutory consultation requirement which this Bill introduces. Consultation provides a better and more accessible way for interested parties to express their views at an earlier stage in the process.

The Minister also explained why the Government would accept a number of non-Government amendments on this area to extend the provisions to cover the establishment of new town development corporations and to ensure that these corporations took into account the need for sustainable development and good design:

Non-government Amendment 128ZA would introduce the same process for establishing new town development corporations and areas as will apply under the provisions of this Bill to UDCs and UDAs. Non-government Amendment 128ZB would ensure that new town development corporations took into account the need for sustainable development and good design in pursuing their objectives. I am grateful to the noble Lords, Lord Taylor and Lord Best, for tabling these amendments.

When the noble Lords tabled similar amendments to Amendment 128ZA in Committee, my noble friend Lady Evans welcomed them as introducing a modernised process for establishing new town development corporations and areas. That modernised process will facilitate the role they can play in creating new, locally led garden villages and towns.

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Similarly, Amendment 128ZB makes it clear that sustainable development and good design must be at heart of what new town development corporations do. My noble friend Lady Evans indicated in Committee the Government’s receptiveness to extending the objectives of new town development corporations in this way. I am accordingly pleased to accept Amendments 128ZA and 128ZB as tabled and urge the House to accept government Amendments 127 and 128.139

Amendments 127,128, 128ZA and 128ZB were all agreed without division.140

10.2 Amendments made at Third Reading Duration of Permission in Principle Baroness Williams of Trafford moved Government amendments 10 and 11 which she said came after reflecting on representations from Lord Beecham and those made by the Delegated Powers and Regulatory Reform Committee (DPRRC) in its 28th report. The amendments put on the face of the Bill how long permission in principle can be granted for. Unless local authorities choose to vary these locally, it would last for five years in the case of permission in principle granted through locally prepared plans and registers, and three years for permission in principle granted on application to a local authority. The amendments will also enable the Government to reduce these timeframes in the future through secondary legislation made by the affirmative procedure, as recommended by the DPRRC.141

Amendments 10 and 11 were agreed without division.142

Planning freedoms Viscount Younger of Leckie said that Government amendment 12 was to amend Clause 154 tabled by Lord Lucas at Report Stage on planning freedoms. This was to reflect Lord Lucas’s intention that planning freedom schemes should apply only in England.143

Amendment 12 was agreed without division.144

10.3 Consideration of Lords amendments (3 May 2016)

As with the housing measures in the Bill, the Commons disagreed with a number of Lords amendments including those relating to:

• a neighbourhood right of appeal; • affordable housing contributions for small scale developments;

and • sustainable drainage systems.

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Government amendment 97A, proposed in lieu of the Lords amendment to introduce a neighbourhood right of appeal, was agreed without division. The aim of this amendment is to make clear how the plan will be taken into account in making a planning recommendation.145

The Commons divided on Lords amendment 110 concerning sustainable drainage systems. Amendment 110 was disagreed to by 285 votes to 164 (285 to 161 for constituencies in England and Wales).146

The Commons agreed to Lords amendment 111 which will limit to five years the time during which the pilot to test the privatisation of processing planning applications can run, together with a Government amendment (111A) to restrict the pilot to England.147

10.4 House of Lords: Commons amendments and reasons (4 May 2016)

The Lords agreed with a Government amendment in lieu of amendment 109 to exclude rural exception sites, national parks and areas of outstanding natural beauty from the Secretary of State’s powers under clause 143. Baroness Royall, who moved the original amendment, expressed regret over the Government’s approach:

My amendment was designed to ensure that the majority of new affordable housing in those communities which are in developments of 10 units or less and which were developed thanks to Section 106 agreements would be safeguarded. I regret that the amendment before us today simply does not provide that reassurance, but I am glad that the Minister recognises that the particular issues faced by rural areas other than national parks and areas of outstanding natural beauty still have to be addressed.148

The Lords declined to agree to the Commons amendment 97A, proposed in lieu of Lords amendment 97 to introduce a neighbourhood right of appeal. Baroness Parminter proposed a further amendment 97B to give a right of appeal to parish councils and neighbourhood forums.149 Her amendment was agreed on a division by 248 votes to 214.150

The Lords also agreed to insist on amendment 110 concerning sustainable drainage systems. Baroness Parminter’s Motion M1, was agreed to on a division by 223 votes to 199.151

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10.5 Consideration of Lords message (9 May 2016)

The House of Commons resolved to insist on its amendment 97A in lieu of Lords amendment 97 and to disagree with Lords amendment 97B concerning a right of appeal for parish councils and neighbourhood forums.152 The Minister, Brandon Lewis said:

I do not believe we should be routinely reopening debate on locally made decisions, which is effectively what this Lords amendment would enable. Those decisions are locally and democratically accountable and they already take into account neighbourhood plans. I ask this House to send the amendment back, while reconfirming my commitment to work with colleagues to ensure that neighbourhood plans enjoy the primacy that we intend them to have in planning law.153

Lords amendment 109B was agreed to (without division) to provide that clause 143, in relation to planning obligations, will not apply where:

a) planning permission for the development was granted wholly or partly on the basis of a policy for the provision of housing on rural exception sites, or

b) the obligation relates to development in a National Park or in an area designated under section 82 of the Countryside and Rights of Way Act 2000 as an area of outstanding natural beauty.154

On sustainable drainage systems, the Commons disagreed with Lords amendment 110 but resolved to agree to an amendment (110C) in lieu to add a new clause to the Bill providing that:

The Secretary of State must carry out a review of planning legislation, government planning policy and local planning policies concerning sustainable drainage in relation to the development of land in England.155

Brandon Lewis said he was concerned about the impact of Lords amendment 110 on housebuilding “and our ability to bring forward the homes that people need.”156

House of Lords: Commons reasons and amendments (10 May 2016) A neighbourhood right to be heard

In response to the removal by the Commons of the neighbourhood right of appeal, Baroness Parminter (Liberal Democrat) proposed Amendment 97D in lieu of Amendment 97A.157 Amendment 97D proposed that local authorities should have special regard to the policies in neighbourhood plans. That planning authorities must consult with neighbourhood plans and take account of their views before decisions are taken. It also provided for the decision to be called in before

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planning permission is granted. The Baroness said that the Bill needed to do all it could to ensure that local people invest the time and the effort in putting together neighbourhood plans. In response, Baroness Williams of Trafford for the Government said that while she could not accept the amendment, the Government would be willing to look at the issue further in the future:

While I very much welcome the direction of travel of the amendment, which is focused on the call-in process, now is not the time to pursue the matter. This issue was not part of the original Bill and the other place has made clear its approval of the Government’s amendment in lieu. The Minister for Planning and Housing has made it very clear that he is willing to work with colleagues to return to this issue in due course. I hope that this is as encouraging to noble Lords as it was to certain Members of the other place—and particularly to organisations such as CPRE which have lobbied on this matter.

Although the Government cannot support this amendment, I understand the advantage of an approach that is based on the existing call-in system and the constructive manner in which it was laid. The Government are willing to look at this issue further, and I hope that provides the reassurance to the noble Baroness for her to withdraw her amendment.158

On this basis, Baroness Parminter withdrew the amendment.159

Sustainable drainage systems

The Government’s Commons amendment 110C in lieu was agreed to.160 Before this however, Baroness Parminter (Liberal Democrat) proposed another amendment in lieu (110D) which she said was to ensure that the Government’s proposed review of planning policies concerning sustainable drainage would be thorough.161 Speaking for the Government, Baroness Williams of Trafford said that the Government could not accept this amendment because it would make the review too broad in scope.162 Baroness Parminter withdrew the amendment on the basis that the Minister had “made reassurances from the Dispatch Box around the thoroughness of the review and of working towards a date to enable comments to come forward in a timely manner”.163

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11. Compulsory Purchase Part 7 of the Bill relates to the reform of the compulsory purchase system.

No amendments to this part of the Bill were made in Committee stage in the Lords.

Amendments made at Report Stage Viscount Younger of Leckie moved a series of 90 government amendments, many of which he described as consequential.164 He explained the amendments as follows:

Government Amendments 128A to 128S, from after Clause 164 to Clause 168, deal with refinements to the various methods of entry and taking possession of land, once a compulsory purchase order has been confirmed. Amendment 128A confirms in statute what practitioners have assumed the law already means: if a normal notice to treat has been served, an acquiring authority may not then execute a general vesting declaration in respect of that land. Continuing with Amendments 128B and 128C, these address the issues raised by Committee Amendment 103BAA, tabled by the noble Earl, Lord Lytton, and spoken to then by the noble Duke, the Duke of Somerset.

Amendment 128C deals with the issue of a new interest in land emerging after a notice of entry has been served. The noble Duke, the Duke of Somerset, told us, on 23 March at cols. 2447 and 2448 of Hansard of three issues that were of concern to the Compulsory Purchase Association: delay when new notices must be served; reliance on poor quality information; and the potential for the creation of ransom interests. I believe that revised new Section 11A of the Compulsory Purchase Act 1965 deals with all of these. New subsections (2) and (4) suspend any existing notices of entry until notices have been served on the newly discovered interest, but the new normal minimum notice period of three months is replaced by the later of 14 days or the date specified in any previous notice of entry. The proviso in new subsection (3) is that this truncated notice period applies only if the acquiring authority was not aware of the person because it was given misleading information when carrying out inquiries, or the land is unoccupied.

The Government believe that ransom interests will be prevented by the qualifying provision in new subsection (1)(b). This ensures that new Section 11A applies only where an authority becomes aware of an owner, lessee or occupier to whom it,

“ought to have … given a notice to treat”,

under Section 5 of the Compulsory Purchase Act 1965. Interests created after a notice to treat on the land in question has been served are not entitled to notices of their own, so they need not hinder the acquiring authority.

I turn to Amendments 128D to 128J inclusive. Clause 166 provides for a counternotice to a notice of entry to require possession to be taken on a specified date. Amendments 128D to 128J, except for Amendment 128G, are technical amendments

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changing the description of the person who can serve such a notice from,

“a person who is in possession”,

to,

“an occupier with an interest in”,

the relevant land. The reason for this is that the date of entry is of particular interest to the occupier, who should be in control of the process. A person, such as a freeholder, can be “in possession” without being in occupation of land.

Amendment 128G sets out circumstances in which the counternotice requiring possession to be taken will have no effect, either because the notice to treat has been withdrawn or ceases to have effect, or where the authority is prohibited from taking possession by other provisions of the Compulsory Purchase Act 1965. In the latter case, the claimant can serve a further counternotice once the prohibition ceases. Amendments 128K to 128S make changes to the New Towns Act 1981, as amended in Clause 168, corresponding to those in Amendments 128B to 128J.

Government Amendments 128T to 128V, 128Y, 128YAA, 128YAB and 142 concern the compensation provisions from Clauses 171 to after Clause 175 and mainly cater for some of the less-frequent situations that could arise following the making of an advance payment of compensation.

I will now talk to a series of amendments that protect the position of the Welsh Ministers, who have executive functions under the Land Compensation Acts. Clause 171 amends the Land Compensation Act 1961 to give the Secretary of State the power to impose further requirements about the form and content of a claim for compensation by a person whose land has been compulsorily purchased. The Welsh Ministers have executive functions under this Act, so Amendments 128T, 128U and 128V also confer this power on the Welsh Ministers. Amendments 128Y, 128YAA and 128YAB do the same thing in Clause 172, which gives the Secretary of State the power to impose requirements about the form and content of a request for an advance payment.

In this context, it is convenient to mention Amendment 142, which provides for Clause 161, confirmation by inspector, and Clause 163 with Schedule 15, notice of general vesting declaration procedure, to be commenced on different days for different areas. These provisions may need to be commenced on different days in England and Wales, as both will require amendments to existing secondary legislation, some of which is a function of the Welsh Ministers in Wales.

The remaining amendments in the group are mainly to do with advance payments of compensation. The first is Amendment 128W, which relates to compensation for losses or expenses incurred by a person as a result of a notice to treat being withdrawn. The proposed new clause in the amendment extends the entitlement to compensation to a person who has acquired the property to which the notice relates—perhaps by inheritance—before the withdrawal of the notice. This is a clarifying measure for the avoidance of doubt.

Clause 172 enables an acquiring authority to request further information from a person who has made a claim for an advance

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payment of compensation within 28 days of receipt of the claim. Amendment 128X completes the picture by ensuring that this provision also applies when the advance payment is to be made to a mortgagee.

Amendments 128YAC and 128YAD, and Amendments 128YAF to 128YAJ in Clause 173, amend the earliest date on which an advance payment of compensation must be made from the date of the notice to treat to the date the notice of entry is served. In many cases this will make no practical difference, because the notice to treat and notice of entry are served on the same day.

In some cases, however, the notice of entry follows at a later date. It could be much later as a notice to treat does not cease to have effect under Section 5(2A) of the Compulsory Purchase Act 1965 until three years after it is served. The Government, therefore, think it would be better to ensure that an advance payment is not made until the acquiring authority has signified its intention to enter the land. This reduces the risk of an advance payment having to be repaid. It is unlikely that an authority will decide not to go through with its scheme once it has reached this stage.

This leads me to the remaining two batches of amendments in this group: Amendments 128YAM and 128YAN; and Amendments 128YAP and 128YAQ. Both batches deal with situations that should be very rare, but if they did occur, the parties could be left in a difficult position if there was no procedure to deal with them.

Amendment 128YAM provides that where an advance payment has been made, but the claimant’s interest in some or all of the land has been acquired by another person, whether by sale or inheritance, the advance payment will be set off against the final claim. This is a very small adjustment to the existing law. Amendment 128YAN inserts new Section 52AZA into the Land Compensation Act 1973 to expand on the procedure to be followed if any part of an advance payment must be repaid. It replaces subsection (5) of Section 52 of the 1973 Act—omitted by Amendment 128YAM—and caters for the situation that could arise under the new payment regime whereby the notice to treat ceases to have effect or is withdrawn after the advance payment is made. Amendments 128YAP and 128YAQ make similar provision for repayment where the advance payment has been made to a mortgagee.165

The amendments were all agreed without division.166

Further Government technical amendment 129 was also agreed without division.167

Amendments made at Third Reading Government technical amendments 13 and 14 were both agreed without division.168

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12. Carbon compliance standard for new homes

Liberal Democrat Peer Baroness Parminter moved amendment 118 which would insert a new clause to introduce a “carbon compliance standard for new homes” into the Bill. The aim was to ensure that new homes contributed to meeting greenhouse gas targets and to help lower fuel bills. The amendment would require the Secretary of State to make regulations, within one year, to ensure that all new homes in England built from 1 April 2018 achieve the carbon compliance standard. The carbon compliance standard is defined in the amendment as “an improvement on the target carbon dioxide emission rate, as set out in the Building Regulations 2006, of—(a) 60% in the case of detached houses; (b) 56% in the case of attached houses; and (c) 44% in the case of flats.”169

Crossbench Peer Lord Krebs, also Chair of the Committee on Climate Change, Adaptation sub-Committee, said that “if we do not require the zero carbon homes standard today, we will have to introduce it at some point in the future” and that there were compelling reasons to accept this amendment, “in terms of both our climate change commitments and cost effectiveness.”170

The Parliamentary Under-Secretary of State, Department for Communities and Local Government, Baroness Williams of Trafford, said that the Government had changed the Building Regulations in April 2014 to improve energy efficiency standards in new homes and that “we think it is right to give the housebuilding industry breathing space to build these highly energy-efficient homes before making further changes.”171 She also highlighted ongoing work to strengthen the current standards:

Current standards will be assessed against these to see whether they are cost optimal. If there is room to go further, the directive requires member states to take action to strengthen these standards.

As part of the process, we will seek the expert views of the Building Regulations Advisory Committee. We would also welcome evidence from the industry and others. In particular, we would like to receive evidence from the Committee on Climate Change, as well as from noble Lords in this House. We expect work to conclude in the autumn, to give time to reflect on the conclusions, to report to the Commission next year and to consider what needs to be done in any future Building Regulations. We would be happy to keep noble Lords apprised of the progress with the review and its conclusions.172

She concluded by saying:

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I hope this reassures your Lordships that we are committed to a review and to introduce nearly zero energy building standards by the end of this Parliament, and therefore that the proposed clause is not needed.173

Baroness Parminter said that she had not heard anything to change her view of why the amendment was needed and so pressed it to a division, where it was agreed by 253 votes to 205.174

For further information about policies relating to zero carbon homes, see Library briefing paper, Zero Carbon Homes, 27 April 2016.

Consideration of Lords amendments (3 May 2016) The Commons disagreed with the new clause to introduce a carbon compliance standard for new homes. The Lords amendment was defeated on a division by 286 votes to 163 (277 votes to 149 for constituencies in England).175

House of Lords: Commons amendments and reasons (4 May 2016) The Lords agreed to insist on their amendment to the Bill to introduce a carbon compliance standard for new homes. Motion K1, moved by Baroness Parminter, was agreed to on a division by 237 votes to 203.176

Consideration of Lords message (9 May 2016) The Minister, Brandon Lewis, commented on Lords amendment 108:

I am not convinced that amendment 108 will help to house those who are desperate for a new home. New homes built in England must currently meet tough energy efficiency standards. As I have said, those standards were strengthened by 30% in the previous Parliament, saving £200 on energy bills compared with the standards prior to 2010. We should be proud of that. To meet those standards, homes have A-rated condensing boilers, double-glazed windows with low-energy glass, high levels of insulation and airtightness in their construction. They are very energy-efficient homes. The amendment would create additional construction costs, which could push some small builders out of the industry completely—at a time when we are trying to encourage more to come back in—by making developing much-needed homes totally unviable in some areas.177

He proposed an amendment (108C) in lieu to place a statutory duty on Government to undertake a review of energy standards for new homes. This amendment was agreed to on a division by 292 votes to 205 (276 to 175 in respect of English constituencies).178

House of Lords: Commons reasons and amendments (10 May 2016) The Government’s Commons amendment 108C in lieu was agreed to.179 Before this however, Baroness Parminter (Liberal Democrat)

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47 Housing and Planning Bill: Lords amendments and Ping Pong

proposed another amendment in lieu (108D), which she called a “compromise amendment”, explained as follows:

The amendment before your Lordships is a compromise. At the last stage we were proposing carbon standards of 60% for detached properties, 56% for attached properties and 44% for flats. This compromise would set the reductions at 44% in greenhouse gases on the basis of comparison with the building regulations in 2016. That is the level that the Government recommended during their time in coalition as the on-site zero-carbon standards, which would take effect from this year. It is those standards that a growing number of local authorities were setting as a condition of giving planning permission, until they were scrapped by the then Secretary of State, Eric Pickles, last year. I point out that, between 2007 and 2014, 79,000 homes in England and Wales were built to this standard. Further, Scotland has introduced this standard already, last October, and the volume of houses to this standard is growing. Therefore, the standard is proven to be both effective and achievable.180

Speaking for the Government, Baroness Williams of Trafford did not accept the amendment:

It is helpful that the noble Baroness, Lady Parminter, has revised the carbon compliance standard in her new amendment, but we still do not know the risks it may pose to the viability of home building in some parts of the country, or the impact it may have on the home building industry, particularly some small builders. We need a clear understanding of what is technically possible, viable and cost effective to make any changes to energy performance standards for new homes. That is why we are introducing a statutory duty on this Government to undertake a full and comprehensive review of energy standards based on cost effectiveness and the impact on housing supply. We will report back to this House on the outcome of the review within the next 12 months.181

Baroness Parminter pushed her amendment to a division where it was defeated by 230 votes to 234.182

180 HL Deb 10 May 2016 c1707 181 HL Deb 10 May 2016 c1710 182 HL Deb 10 May 2016 c1712-14

BRIEFING PAPER Number 07562, 11 May 2016

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