Lord Fuller (Con)

My Lords, environmentalists are up in arms on the nature restoration fund and EDPs because they break the link between a development and its nature mitigations. Developers are saying that the cost, risks and delay are making development unviable, while everybody argues that nothing is getting built in those areas of the country with the greatest housing potential. Taken together with all the environmental fees, charges and other levies, it has put the price of a new home up by about £30,000 to £40,000 in the last five years. The hard truth is that well-meaning but counterproductive nature levies and other levies are damaging our economy, with brickies, ground workers, sparkies and chippies all sitting idle. Of course, the simple truth is that not building new homes—especially social homes, which are the first to get the chop when viability is in question—is not going to clean up the rivers. The organisation that is meant to grip this has singularly failed in the five years since it misdirected Ministers that families trying to get their feet on the housing ladder should bear the brunt of upgrading the sewage treatment works, rather than the water companies whose job it really is. The situation we find ourselves in today is a direct result of Natural England misdirecting itself as to the science and arithmetic of nutrient mobility. It confused absorption with adsorption and has misrepresented scientific papers that it purports support its position when the reverse is true. By way of a declaration of interest, I am involved in the fertiliser industry, so understanding nutrient mobility in soils is one of my specialist subjects. About four years ago, when it became obvious that Natural England had stymied housebuilding in my area and was incapable of addressing river pollution, I established the Norfolk Environmental Credits company, which is owned by all the councils of Norfolk, to do the job that Natural England has the staffing, powers, software and responsibility to do, but does not. I was the person who set up that green financial market referred to by my noble friend Lady Coffey. Five years on, if it were not for people like me rolling up my sleeves to get this problem addressed—and franchising it to other council areas in other catchments—no new homes would have been built in the entirety of this Parliament. I would like to take credit for this, but I am anxious that all this hard work will have been for nothing if Natural England takes our homework, runs away with it and leaves us high and dry. The problem is that Natural England has been allowed to get away with being simultaneously the regulator, adviser, enforcer, operator, pricer, procurer and competitor in a market in the grossest case of multiple conflicts of interest that, in any other walk of life, would be closed down for being contrary to the public interest. Its advice has caused us to sleepwalk into an Alice in Wonderland situation where a fertiliser colleague could sell a farmer a kilo of phosphate for 85p, but a developer must spend £50,000 to remove it from the treatment works at the other end. If that was not crazy enough, the Government have made the river problem even worse by subsidising the production of over 20 million tonnes of biogas digestate—applied to the land at the wrong time of year—which does more than anything else to turn the rivers green. Yet these polluters do not pay a penny into the fund. It is wrong. All these levies have brought developers to their knees. All they wanted to know was how much, when, where and how these charges would be applied, as well as the scope, extent, cost and regulation that the EDPs require in an evidence-based and transparent manner, with a degree of consistency from one place to another. But it was too much to hope for. When the regulations were laid in June, the first were all about how Natural England could charge and enforce its fees. We are still none the wiser on the important things. The credibility of the nature restoration fund ultimately rests on a simple question: will levy income be sufficient to fund conservation measures for as long as they are required to deliver the promised environmental outcomes? When we went through the then Planning and Infrastructure Bill, we warned of the consequences of allowing Natural England to lead on this when it could not even get their stories straight on the jumping spiders or the ponies or the advice on bird flu, which was used as a bogus pretext to license shooting in the land use framework. It has ceased to be trusted. Through its indolence, we still have no idea whether the EDPs would issue some sort of permit or a licence for the resident to flush his lavatory in his new home. That distinction is important. A permit is an asset that is tradable on the secondary market—repeating the milk quota disaster of the 1980s—whereas a licence, if no longer needed, perhaps because a sewage treatment works has been upgraded, can be surrendered so that the mitigation can be applied again for the benefit of the taxpayer for the remainder of the 80-year term. Is it a licence or a permit? We do not know. It is an important matter. Now we get to the pricing. The market for phosphate credits has settled at around £5,000 per dwelling. That fee covers not just the immediate costs of introducing a mitigation but those tail liabilities of management for at least 80 years together with inspection and regulatory costs along the way. As I explained during the passage of the Planning and Infrastructure Bill, this is an actuarial evaluation problem. The problem is that Natural England exhibits little understanding of this simple economic reality. All indications are that it will just pick a number out of the air that is wholly unrelated and untethered to those liabilities, and, in so doing, chop off at the knees people—like me, through our councils—who rolled up their sleeves to fix the problem when Natural England would not. If it does that, it will at a stroke further damage our economic reputation, because there is one area in which the UK has developed some quite interesting and valuable intellectual property: the running of nature markets. All the indications are that Natural England’s cack-handed ignorance would completely destroy the accumulated value of these nature markets. Our company has already had to take an impairment. When are the Government going to get a grip and rein in this organisation that has so wilfully misunderstood the science, made our economy smaller and homes more expensive, left social homes unbuilt and workers and professionals sitting at home, delayed mitigations and imperilled our global leadership in the nature market—all when Natural England’s first priority, through its regulations, was simply to featherbed their own bureaucracy?