Lord Fuller (Con)

My Lords, I shall speak to government Amendment 346E in the names of the noble Baroness, Lady Taylor, and the noble Lord, Lord Grantchester, and Amendment 275A in the name of my noble friend Lady Neville-Rolfe. I approached this group with the words of the noble Lord, Lord Livermore, ringing in my ears from yesterday’s Oral Questions. He boasted how the Government’s planning reforms would cut away the bureaucracy to get Britain building. Perhaps he was thinking about that other planning Bill announced by the Chancellor in August. He could not have been thinking about the one before us today, because given the combination of Part 3 of this Bill, the involvement of Natural England, and the astonishingly long preparation process for EDPs, starting in Clause 58 but going on as far as Clause 61, it is difficult to see how any mitigation proposal envisaged by Part 3 can be completed in the three and a half years from now —and that for a Government who have only three and three-quarter years to run. Even if Part 3 stands part of the Bill at the point of assent, it will take until the next Parliament before someone gets the keys to a new home that has been subject to an EDP. Perhaps someone should tell the noble Lord, Lord Livermore, that Part 3 does not work, and it will not get Britain building or the economy growing. I should know, because I have been in this space for the last three and a half years as the instigator and a person of significant control in Norfolk Environmental Credits Ltd, a company established and owned by all the planning authorities in Norfolk for the benefit of the local councils, taxpayers and economy. I know what I am talking about—this is another one of my specialist subjects. I observe that government amendment 346E is a long one. I suppose we should be grateful that it recognises that the Bill as introduced was deficient, but it is incomplete. It articulates the problem and identifies the EDP participants, but it does not contemplate the earliest formative stages—the commercial, legal and contractual practicalities to put it into effect. Let us think about the EDP processes that start in Clause 58. At the outset, it emerged on Monday that Natural England will report to the MHCLG Secretary of State, not Defra. That is quite a revelation. What technical knowledge exists in MHCLG to judge the veracity of the poor-science and unevidenced assertion referred to by the noble Lord, Lord Hunt, in today’s Telegraph, where he is reported to have said that “anti- growth” environment quangos are blocking developments on spurious grounds? How can MHCLG have the intellect and capacity to assess this spuriousness? Our company in Norfolk aims to go beyond the desirability of cleaning up our rivers and devise commercial models that are legally robust and contractually certain, with a financial system that discounts the 80-year tail liabilities and makes the bridge between those who need to purchase mitigation and those who are prepared to provide it. I can tell noble Lords from personal practical experience how hard it is to devise a system to resuscitate the second-largest sector of our local economy—which has been placed in suspended animation for the past three and a half years—to provide the much-needed homes, affordable-homes infrastructure and mitigation in an area two-thirds of the size of our county. My insight is that, before the provisions envisaged by this amendment are engaged, there are some fundamental principles to be established first. They should be set in statute, but they are not. It is envisaged that the EDPs will issue permits or licences. It is a critical point. A permit is something that is purchased and bought and has asset value. Noble Lords with long memories will remember the last time the state tried to introduce such permits to solve a problem: it created the madness of the milk quota system. By contrast, a local authority issuing licences provides for the point at which the mitigation is no longer required because, say, the local sewage treatment plant has been upgraded. Then the licence can be surrendered and issued again, with that second slice of revenue returned to the taxpayer. At the drop-in session last week, Natural England’s representatives had blank faces when I asked them what they planned to sell to developers—permits or licences. They had not a clue. That illustrates the intellectual hole in that organisation. The risk of the permit approach is that, once issued to the builder of a new home, the nutrient neutrality permit is attached to that home and goes with the conveyance. That permit will have cost somewhere between £5,000 and £15,000. That is a pretty powerful incentive for the home owner to sell it on to someone else, so we find ourselves, as with milk quotas, sleepwalking into creating markets for tradeable assets, secondary markets, derivatives and everything else that history tells us happens when the state gets into the permitting business. The taxpayer misses out: that is the lesson from the milk quota fiasco. By contrast, a licence is never owned by the developer or the landowner; it does not exist as an asset; contractually, it is tied to the property; and it can only be surrendered back to that property. The perverse incentive to sell it on and create secondary markets falls away. That is what we should be doing, but none of this fundamental design principle or parameter is contemplated by either Amendment 346E or the Bill. Let us move on and think about the longevity of an EDP. It is proposed that an EDP lasts for 10 years—an assertion restated in the letter to noble Lords this morning, for which I thank the Ministers. But the tail liabilities are 80 years for nutrient neutrality and 30 years for biodiversity net gain, so I question whether a local planning authority can issue a permission if they are not sure what will happen between year 11 and year 80. I do not believe they can legally issue the permission. Perhaps the Minister will clarify that.