Baroness Thornhill (LD)

My Lords, I was very pleased when this amendment was debated in Committee, as there was a very small but warm consensus that it seemed fair and reasonable. We are well aware that SMEs face many challenges, but we believe that this is a small but significant signal to them that we understand their concerns. The problem could not be clearer: the planning system is, by its very nature, stacked against the little players—small and medium-sized housebuilders, those local and skilled firms that know their communities best. They are operating in a system designed for the big players. They already face headwinds from finance, land supply and market exposure, yet our own planning system makes these headwinds stronger. Planning fees are one of the clearest examples of how policy, unintentionally, financially disadvantages smaller builders that are already struggling to survive. Small builders now deliver only 10% of new homes in the UK, which is down from almost 50% in their 1960s and 1970s heyday. The number of SME housebuilders has fallen from more than 12,000 in the 1980s to around 2,500 today. When we debated this in Committee, the Minister said that the Bill already provides a clear framework and that local authorities will have the flexibility to vary fees through consultation and benchmarking. This is precisely the framework that has created the problem. Benchmarking, consultation and cost recovery sound absolutely reasonable in theory, but in practice they are the very mechanisms that have produced the current imbalance. SMEs already operate under a national system built on these principles, and it has led directly to them paying far more per home than large developers. This is an evidenced fact. Simply devolving this flawed model to local authorities will not suddenly make it fair.