Baroness Taylor of Stevenage (Lab)

My Lords, I am grateful to all noble Lords for their considered contributions. It has been a useful debate, but some of it has reflected some of the issues that we rehearsed in the Planning and Infrastructure Bill and has not focused as much on the regulations. I will try to touch on as many points as I can, but I am sure noble Lords will appreciate that, in a short debate such as this, if I do not get to them, I may have to respond in writing. The noble Lord, Lord Roborough, raised the key issue of the balance between MHCLG and Defra, both specifically around EDPs but also more widely about the nature restoration fund. We are going to have to get used to working across more than one department on some of these issues. Defra clearly has a key role, but MHCLG is the ministry responsible for planning, so we have to make sure that we get that balance right. As far as I know, Defra will continue to be responsible for EDPs. We had long discussions on the Bill about the Secretary of State for Defra signing off EDPs. If that is not the case, I will come back to the noble Lord, but my memory is that it is. A number of noble Lords raised issues that were discussed during the passage of the Bill around the capacity and capability of Natural England. The noble Lords, Lord Roborough and Lord Jamieson, and the noble Baroness, Lady Coffey, mentioned this. Natural England is the appropriate delivery body for the NRF. It has internal expertise and is able to operate effectively across the whole of England. By providing an alternative to the existing approach of the fragmented, site-by-site mitigation that we saw, through the introduction of a strategic, plan-led system, the NRF enables Natural England to deploy more expertise more efficiently across regional geographies. It will be supported to take strategic action and to deliver the conservation measures set out within individual EDPs using income from the nature restoration levy. The regulations also enable targeted use of levy funding to cover the administrative costs, which there were a number of questions about. It can be used for the administrative costs associated with the delivery of individual EDPs, not spread across the country. This will enable Natural England to build and maintain the capacity and capability to design, implement and monitor EDPs effectively. The noble Lord, Lord Roborough, focused a lot of his comments on viability, as did the noble Lord, Lord Fuller, and I understand the reasons for that. I point out initially that the NRF is not the only consideration in planning in relation to infrastructure. The whole planning system—we have just republished the NPPF—makes it very clear that all issues around infrastructure must be taken into account. On the NRF, Natural England will have the flexibility to set rates that reflect local circumstances and capture specific environmental and delivery considerations across the EDP. Where levy rates need to be higher, this will reflect the genuine cost of securing required conservation measures to address the impact of development. The vast majority of EDPs will be voluntary—I will come on to the mandatory issue in a moment—so developers will be able to choose between using the EDP or meeting environmental obligations through existing means. Rates will be set out in the individual EDP charging schedules, alongside information regarding how they have been set. It will therefore be a requirement on Natural England to set out how it has set its rates. Levy rates will vary between EDPs and can be calculated for specific development by reference to factors including the type of development, the location and environmental impact. On the mandatory EDPs, which the noble Lord, Lord Roborough, and the noble Baroness, Lady Parminter, both mentioned, we would expect EDPs to be made mandatory only in very limited circumstances—for example, where Natural England has worked directly with a developer on a specific EDP to cover its project alone. All EDPs will be subject to a full public consultation before they can be made by the Secretary of State. Given that the vast majority of them will be voluntary, if an EDP is not a viable, competitive or attractive option, developers can continue to use existing routes to meet their obligations, limiting the ability of Natural England to deliver the wider environmental benefits that the NRF is designed to achieve. So, in all but exceptional circumstances, EDPs will be voluntary. The noble Lord, Lord Roborough, raised the issue of the mitigation hierarchy and whether this is being weakened by this process, leaving Natural England with too much discretion. Throughout the passage of the Bill, we were clear that the mitigation hierarchy lives on in this model, but that Natural England is not required to apply it in the inflexible way that has often constrained strategic nature recovery. To make sure the Government were as transparent as possible on this point, a specific duty was introduced in the House requiring regulations to be made setting out the appropriate prioritisation, by Natural England, of the different ways of addressing any negative effect of development. The Environmental Delivery Plan (Appropriate Prioritisation) Regulations, laid alongside the regulations before us, deliver on that commitment. They make clear that Natural England must consider the mitigation hierarchy when developing an EDP, while they preserve the discretion of Natural England to determine the appropriate conservation measures in the circumstances. The noble Lord, Lord Krebs, and the noble Baroness, Lady Willis, have been working very effectively with Defra on these issues, and I am very grateful to them for their input. Issues were raised around gold-plating of conservation measures, notably by the noble Lords, Lord Roborough and Lord Fuller. While Natural England must prepare EDPs based on the best available scientific evidence and explain why the proposed conservation measures are appropriate, it is also required to set levy rates that will enable the recovery of the costs of delivering the EDP, rather than generate surplus funds. All EDPs, as I said, are subject to public consultation and approval by the Secretary of State. Finally, Natural England will be incentivised to ensure that the levy remains competitive and attractive to developers, as EDPs will be voluntary in almost all circumstances. So, if it gold plates them, developers will not accept them. It is as simple as that. The noble Baroness, Lady Coffey, and the noble Lord, Lord Roborough, raised issues around consultation. There are government consultation guidelines which I am assuming have been recognised in the consultation on this but, if the noble Baroness will allow me, I will go back and check that this type of consultation follows those guidelines and respond in writing on that point. On the issue of setting the levy, raised by the noble Lords, Lord Randall and Lord Fuller, and the noble Baroness, Lady Coffey, the levy regulations establish clear parameters that Natural England must follow when setting the levy rates. They also recognise that the costs underpinning EDPs will vary according to the environmental impacts being addressed and the conservation measures required. This framework provides Natural England with the flexibility to set levy rates that reflect local needs and delivery requirements. The levy is designed to enable full cost recovery, so there should not be a cost to Natural England for that, and rates are required to reflect the costs of delivering the necessary conservation measures as well as administration, monitoring and maintenance activities. The governing test remains the overall improvement test, whereby an EDP will materially outweigh the negative effects of development. Although I understand some of the concerns, particularly around viability, we cannot carry on with a situation where developers were doing development that was polluting our rivers in a way that has caused inordinate damage to them. We had to take some action on this. Levy rates will also take account of relevant administrative costs necessary to the delivery of the EDP under which the levy is charged. There were questions on funding from other sources—the noble Baroness, Lady Parminter, raised this and the noble Lord, Lord Randall, had some concerns about this issue as well—and about whether the ability to reduce levy payments where there is funding from other sources will result in developers not paying their fair share. That is not the case. The provision is intended to allow a targeted flexibility in very limited circumstances, enabling the Government or other sources to contribute to the costs of delivering an EDP where appropriate to support viability for certain types of priority development. That is what that provision in the regulations is for. The noble Baroness, Lady Parminter, asked about the timing of levy payments, which is a very important point. I know she is concerned about the payments by instalment. The regulations enable payments to be made in instalments to better align with the realities of build-out phases, but this will be possible only where expressly provided for by Natural England through instalment plans. Instalment plan options may vary between EDPs. Where an instalment plan is used, payments will typically be spread across the development period rather than being required in full up front. However, even where an instalment plan applies, the first instalment must be paid before development can commence. I will not go into the detail because I do not have time, but there are clear provisions to help Natural England with enforcement and the follow-up if payments are not made. We have looked very closely at that. In conclusion, the instrument sets out a framework for the nature restoration levy and provides Natural England with the tools it needs to implement the NRF. In response to the noble Lord, Lord Jamieson, whose points were mainly about the housing crisis—a housing crisis that his Government caused and we are now trying to fix—I make no apologies for wanting to build these homes, for the £39 billion we are investing in housing, for wanting people’s homes to be safe and secure and for wanting their environments to be sustainable. I trust that the House agrees that these regulations will support the delivery of the nature restoration fund and our shared ambition more widely to grow both nature and the economy. I hope that these regulations will be welcomed.