Town and Country Planning (Costs of Inquiries Etc.) Bill

HC Deb 12 January 1995 vol 252 cc292-322

Order for Second Reading read.

4.6 pm

The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford)

I beg to move, That the Bill be now read a Second time.

The Bill is rather technical and in terms of its geographic spread it could probably be described as a wee Bill, but it has a clause 4!

The Bill is extremely important because it proposes to remove a current source of uncertainty about who should pay for the services of a planning inspector appointed to hold an inquiry on a planning authority's behalf into objections to a development plan or other similar plan. It also applies to Scotland and Wales.

The history of the matter is worth a glance. Since the 1970s, when the first local plan inquiry was held under the then Town and Country Planning Act 1971, the Department and local planning authorities assumed that it was lawful on the basis of an implied contract to impose a charge for making the services of the inspector available. That seemed entirely natural as the planning authority was statutorily required to hold a development plan inquiry and should therefore expect to pay for the expense involved in the process, including the expenses of an inspector whom the Secretary of State appoints independently of the authority.

Some 21 years later, in 1992 and in the following year, Birmingham city council queried the amount charged by the Planning Inspectorate for the inspector appointed to hold the council's unitary development plan inquiry. Subsequently, the council questioned whether any statutory power existed to levy those charges. In support of the argument, the council cited the judgment of the House of Lords in the case of McCarthy and Stone (Developments) Ltd. v. Richmond upon Thames London borough council.

That judgment held that there is no power for a public body to levy a charge for its services in the absence of an express or implied statutory provision. Moreover, I am advised that although the Planning Inspectorate and the local planning authority normally agree on the terms on which an inspector is to be appointed for a development plan inquiry, there is no implied power to charge the authority for this service on any contractual basis.

When my right hon. Friend the Secretary of State and other colleagues were made aware of that legislative gap, the Government decided that the only reasonable course was to fill it as soon as parliamentary time became available.

Mr. Jeff Rooker (Birmingham, Perry Barr)

I agree that the only reasonable course is to fill the gap, but surely it is unreasonable and wrong to apply backdating. I hope that the Minister will explain why the Bill has to be retrospective given that the supremely qualified staff of Birmingham city council, which has constantly been maligned by the Government, brought this matter to the attention of the House and the Government.

Sir Paul Beresford

I thank the hon. Member for that early and anticipated shot. I shall fire a reply in a moment or two. [Interruption.] I shall answer in a moment or two if the hon. Gentleman will just bide his time.

My hon. Friend the then Minister for Local Government and Planning announced in a written answer on 17 February 1994 the Government's intention to legislate on the issue in order to put the matter beyond doubt. [Interruption.] For the benefit of those hon. Members who are squawking, it is worth pointing out that the origin of the problem was in the drafting of the Town and Country Planning Act 1968. If there was sloppy drafting then, it was the fault of the Government of the day in 1968.

Following that announcement, we did not consult in detail with local authorities associations about the provisions to be included in the Bill, but no discourtesy was intended. There are three reasons to explain that. First, as my hon. Friend's written answer explained, the Bill simply restores the situation to what it was previously thought to be by all concerned in these matters. Secondly, the Bill will have no effect on public service manpower, as the explanatory and financial memorandum points out.

Thirdly, the agency's chief planning inspector informed all local planning authorities last year that the inspectorate would collect no further charges for development plan inquiries until the proposed legislation had been enacted. In the meantime, any local planning authority wishing to claim a repayment of its charge will receive it, but authorities have been advised to make full budgetary provision for the amounts that would be due to the Department if the proposed legislation were eventually enacted. This is, in effect, consultation in any event. Having changed sides from local government to central Government, I can fairly say that I have never known local authorities to be slow in responding when finances, either positive or negative, were concerned. We have not been flooded with complaints.

The sums at stake may not seem large in total local government public expenditure terms, but the underlying principle is important. In England and Wales, up to and including 1992–93, they amount to £4.5 million. For 1993–94, £1.4 million has been recovered from planning authorities and paid into a suspense account. A further £2.6 million is owing to my right hon. Friend's Department. In the current year—1994–95—approximately £3 million will be due to the Department. In future years, charges will amount to approximately £3.6 million, on average, while the present development plan work load continues.

The Department has repaid some £2.8 million to 97 local authorities, along with interest payments of approximately £101,000. The principle on which this Bill is based is that authorities should pay for the services that these charges represent and for which provision is currently made in the annual local government financial settlement.

Mr. Anthony Steen (South Hams)

Is my hon. Friend saying that it is not just Birmingham that has not paid, but that a whole raft of local authorities have not paid and are deliberately avoiding paying, or is it simply that they have not been asked to do so?

Sir Paul Beresford

It is not quite as simple as that. Local government, trying to be at its best in managing its finances, has perceived an opportunity. About 97 local authorities have had money repaid, along with interest payments. If the Bill is not passed, that backpayment will not arise again—it will return to Government.

Clause 1, which applies to England and Wales, is the core provision of the Bill. It does two things. First, it enables the Department to recover from planning authorities the costs that we bear, through the Planning Inspectorate, in appointing an inspector to hold what is called a qualifying inquiry. That is an inquiry set up to hear objections to local plans, unitary development plans or simplified planning zone schemes, to consider objections to such schemes or to conduct an examination in public into structure plan proposals.

Secondly, the clause enables my right hon. Friend to provide, by regulations, the standard daily amount and the travel and subsistence allowances that planning authorities are to pay to persons, other than inspectors, who are appointed to conduct an examination in public into structure plans. I regret that the provisions of clause 1 will inevitably seem lengthy and detailed. It is felt that that is necessary to ensure that the provisions do the job properly this time and, so far as humanly possible, do not leave anything to chance.

Clause 2, which also applies in England and Wales, deals with retrospection. If the hon. Member for Birmingham, Perry Barr (Mr. Rooker) pauses in his conversation, he will hear that the Government are persuaded that, exceptionally, retrospection is justified on this occasion for two main reasons. The first is that clause 2 imposes no new financial burden on local planning authorities. It simply validates past payments that authorities made in good faith, believing—as did the Department—that they were sought and paid lawfully. In that context, it is important to remember that provision was made in the annual local authority financial settlement for the estimated sums that planning authorities expected to incur by way of charges for inspectors' services at development plan inquiries.

Dr. Lynne Jones (Birmingham, Selly Oak)

The Minister said that arrangements had been made to allocate resources to local authorities for those purposes. Birmingham council's original estimate for an inquiry, based on information given to it, was about £30,000 yet the final bill was almost twice as much. The council is not aware that its grant from central Government has been increased to take that into account.

Sir Paul Beresford

I am aware that a discussion has taken place, but I find that a little interesting. I decided to check and query the matter and to consider the costs.

Mr. Keith Vaz (Leicester, East)

They were £68,000.

Sir Paul Beresford

No, they were £63,508. The invoice is dated 3 November 1992. The inquiry lasted 35 inquiry days, five inspection site days and 112 working days for the inspector. I shall not go through the details. It is interesting that a similar inquiry involving a well-known authority that is dear to many of our hearts, Wandsworth, lasted 23 days with four site visits—making a total of 27 days. It had a similar number of objections— 51,455. On a day-by-day basis, which is not a fair way of doing it, Wandsworth has more reason to complain than Birmingham.

The second main reason why retrospection is justified is that, without retrospection, the other provisions in the Bill would be unfair to planning authorities that, through no fault of their own, have not yet reached the stage of holding an inquiry as part of their development plan process. There is no good reason why planning authorities that have already passed that stage should receive a windfall financial benefit through not including retrospective provisions in the Bill.

By arrangement with my hon. Friend the Under-Secretary of State for Scotland, who will reply to the debate, and for the convenience of the House, I shall say a few words about the Scottish provisions in the Bill. I understand that the position has not been tested in the Scottish courts. In addition, planning authorities in Scotland have not, so far, pressed for repayment of the sums paid in the past. I suspect that that is an example of canny Scots. Nevertheless, as my right hon. Friend the Secretary of State for Scotland thinks that similar problems may arise, he considers it prudent to legislate now to remove any doubt about the basis of charges made.

Clause 3 enables my right hon. Friend the Secretary of State for Scotland to set charges by regulations. It establishes a firm statutory basis for payment by planning authorities in Scotland. That will apply in the case of both local plan and simplified planning zone inquiries. Although that provides equivalent powers to clause 1, there are a number of distinctive Scottish features. First, reporters for local plan or simplified planning zone inquiries in Scotland are appointed not by the Secretary of State, as in England and Wales, but by the planning authority from a list provided by the Secretary of State. That list may include both full-time reporters and other suitably experienced people who are not officers of the Secretary of State.

Secondly, examinations in public into structure plan proposals in Scotland are carried out on behalf of the Secretary of State, so the cost does not fall on the planning authority, as it does in England and Wales. Finally, the Scottish Office inquiry reporters unit remains part of the Secretary of State's Department and is not a next steps agency. Clause 3 reflects those distinctive elements but with the same underlying objective and effect as clause 1 for England and Wales.

Clause 4 makes retrospective provision with regard to local plan inquiries, held under the Town and Country Planning (Scotland) Acts 1969 and 1972. There have been no simplified planning zone inquiries in Scotland yet.

As in England and Wales, neither of those clauses implies any new burden on Scottish planning authorities. They are intended to put on a firmer statutory footing the charging arrangements that have operated for a number of years.

Mr. Steen

Can my hon. Friend assure me that the amounts that authorities have already paid in relation to their local planning inquiries will not be increased retrospectively?

Sir Paul Beresford

That is absolutely correct. It is a bill that is related to set fees for time and services rendered.

Mr. Rooker

Is it interest free?

Sir Paul Beresford

I will have to check on that.

Mr. Rooker

The Government have repaid some of the money to local authorities and, as I understand it, they have repaid some of the interest payments as well. Some of the payments must go back 20 years. The Government will now collect that money from local authorities. Will they insist on the return of the interest payments? It is bad enough for them to insist on the interest on the principal sum, but insisting on the interest on the interest would be unfair.

Would not it be a good idea for the Government—I am sure that the Minister will have thought about this—if every time a Department levied a bill on any citizen or local authority, it had to print on that bill the statutory provision that allowed it to make that charge? It should have to give the legal authority that allows it to make that charge on everything, no matter what. With such a provision, this case would not have arisen. In addition, it would highlight any other cases lurking in Whitehall where the Government are illegally charging individuals or authorities.

Sir Paul Beresford

This does not go back 20 years. It goes back to the discussions with Birmingham which were referred to by the hon. Member for Birmingham, Selly Oak (Dr. Jones). We are talking not so much about a refusal to pay as the fact that the bills have not been collected. If the Bill becomes law, all the amounts due then will be recovered from the authorities owing sums for inquiries.

Mr. Rooker

Without interest?

Sir Paul Beresford

I believe so, but I will let the hon. Gentleman know.

This is a technical and comparatively short Bill that provides formal charging powers that everyone had assumed existed for some 20 years. We are remedying uncertainty. Today we are concerned with the principle of the Bill and the Government are sure that it is soundly based on the principle that it is reasonable for the user of a public service to pay for it, including, as we have just discussed, an essential provision for retrospective payment. I commend the Bill to the House.

4.22 pm

Mr. Keith Vaz (Leicester, East)

What a shambles. The Minister has told us that he is announcing a new measure that will provide certainty. In fact, what he has said has created even more uncertainty. He does not know how many years it will go back. In answer to a question from my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) he said that it will go back to the discussions with Birmingham. In answer to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) he said that he does not know whether interest is payable and, if it is, he does not know whether it will be payable from the time the money went back or whether it will be interest free. I hope that by the time his colleague the Parliamentary Under-Secretary of State for Scotland replies to the debate he will have studied the Bill more carefully than the Minister so that he can provide firm answers to the questions that we intend to ask.

There is an old proverb about making haste and acting slowly. There is another equally well-known proverb about people paying for their mistakes. This extraordinary Bill is a combination of both. As the House knows, planning legislation is one of the most complex areas of law. Changes in planning law require the most careful consideration, the most diligent consultation with those most affected by the changes and the best possible briefing for Ministers. With this measure, the Government have unfortunately failed in all those areas. There may be two reasons for that. First, perhaps they made a mistake. Secondly, having made a mistake, perhaps they do not want to admit it. This is not the first time that the Government have made a mistake and do not want to admit it.

The House waited in vain to hear the Minister take some responsibility for this legislative mess, but we did not once hear him say, "Sorry, we have made a mistake." There was no contrition and no apology. The Secretary of State could not find time to come to the Dispatch Box and take responsibility himself.

Sir Paul Beresford

As the Bill refers back to the Labour Government's 1968 drafting, I should have thought that the apology ought to come from the hon. Gentleman's party. In addition, I have now had it clarified that where interest has been repaid that interest alone will be recovered by the inspectorate agency. I hope that that clarifies the issue for the hon. Gentleman.

Mr. Vaz

We now hear from the Minister that it was all Harold Wilson's fault and that it is nothing to do with this Government. The Secretary of State could not come to the Dispatch Box to take responsibility for what had happened because he is the good news man who gets to go to press conferences and to launch new initiatives. The Under-Secretary of State is the bad news man who gets to come to the Dispatch Box when the Government get things wrong. It is ironic that that task should fall to a Minister who, of all the Ministers in the Department of the Environment, knows what it is like to be a local councillor and to carry the heavy burdens of a council leader—although he had privatised most of the council's functions by the time he left Wandsworth.

The Minister knows that every spending decision taken by a local authority has to be set against carefully defined criteria. Local government has suffered immeasurably as a result of the Government's cuts in the past 15 years. The Bill will mean yet another burden on local councils, despite what the Minister says. Having discovered that a mistake had been made, councils will have expected to get the money back and to be able to spend it on the provision of local services. When local authorities make mistakes, they have to pay for them.

The Bill is not only about mistakes: the Government have acted illegally, charging local authorities when they had no power to do so—and it has been going on for years. If local authorities had acted in a similarly illegal way, all hell would have broken loose. The Secretary of State and his Ministers would have been flying around the country demanding that heads should roll. The councils involved would be harried, ridiculed and pilloried and their councillors would be politically persecuted. Yet when the Government are found to have acted illegally, we are supposed to keep quiet about it. The practice has been going on for years without anything being done about it.

The Government seek not only to give themselves power to charge but to do so in respect of past charging errors—and they wish to perform the change "just like that", as Mr. Tommy Cooper used to say. Retrospective legislation is a very dangerous precedent. It is wrong in principle and sets an even more dangerous precedent when applied to local government. It should be used only very rarely. It should not be used when Ministers have flouted the law and the innocent—in this case the councils—are being punished.

Caries, whom I am sure that the Minister has read in preparation for the debate, states in his writing on statute law: A statute is to be deemed to be retrospective which takes away or impairs any vested right … under existing laws, or creates a new obligation or imposes a new duty. Referring to the case of Calder v. Bull, Judge Chase said: Every law that takes away or impairs rights vested agreeably to existing laws is retrospective, is generally unjust and may be oppressive. It is a good general rule that a law should have no retrospect. Yet those persuasive authorities have had no effect on the Government. Despite the general agreement that retrospective legislation is undesirable, the Government wish to proceed with it in this case.

The director of technical services of Durham city council, in a letter to my hon. Friend the Member for City of Durham (Mr. Steinberg), who had hoped to be here this afternoon, spoke for many councils when he said that the Bill would set an exceedingly dangerous precedent if payments which were made with legal authority could be legitimised by subsequent legislation. As the House knows and as the Minister has briefly explained, development plans, structure plans, local plans and unitary development plans have to be the subject of public scrutiny at public local inquiries, examinations in public and hearings. Objections to the proposals are aired at such inquiries. It is a right that the public should have; it is their opportunity to comment on local plans. Such inquiries are chaired by inspectors appointed by the Secretary of State and drawn from the ranks of the Planning Inspectorate. The inspector listens to arguments and makes recommendations to the local authority. As has now become clear, from the first inquiries, Ministers have illegally charged local authorities for the services of inspectors.

The Planning Inspectorate's corporate plan for 1994–97 predicted that the demand for inspectors for development plan inquiries would remain at current levels. Since 1991, the development plans of local planning authorities have had enhanced status and planning applications are now determined in accordance with the plan unless material circumstances indicate otherwise. They are, therefore, very important parts of the planning process.

In terms of the completion of the plans, there is a long way to go. A survey published by the Minister's Department in August 1994 showed that only 60 English districts—20 per cent.—had local plans in place by 31 March 1994. It showed that only 10 unitary authorities—15 per cent. of the total—had unitary development plans. More than 94 per cent. of English authorities are expected to have adopted plans by the end of 1996. In Scotland, as my hon. Friend the Member for Dundee, East (Mr. McAllion) will explain, about 81 per cent. of local plans had been adopted by the end of 1993. The Scottish Office, as I am sure the Under-Secretary of State for Scotland will tell us, expects complete local coverage by the end of this year.

It was Birmingham city council that first raised the issue of the statutory basis for charging by the Secretary of State following, as the Minister has told us, the public local inquiry into the Birmingham unitary development plan. The House and the Government owe a debt of gratitude to the officers and members of Birmingham city council for their role in discovering the Government's error. I also commend the tremendous efforts made by my hon. Friends the Members for Perry Barr and for Selly Oak and by the other Birmingham Members who wrote to Ministers pointing out the error of their ways.

The Birmingham inquiry lasted from November 1991 to February 1992. The inspector's report was received in October 1992, some months later. In November, as the Minister has said, the council received an invoice for £63,000 which exceeded its budgetary provision of £28,000. The reason was not that Birmingham had, in some way, done something to put up the bill. The reason was that the inquiry lasted longer than anticipated-38 days instead of 32. In addition, there was a unilateral 30 per cent. rise in the inspectorate's day rate charges of which the council was notified shortly before the inquiry opened.

That bill was challenged on two counts: first, the size compared with what was estimated and, secondly, the statutory basis for the charge. On 24 June 1993, the assistant director of planning, Mr. Wenban Smith, wrote to the planning inspector, Mr. John, pointing out that as no regulations had been made under section 16 of the Town and Country Planning Act 1990 there was no statutory basis for the charge. It was further attested by Birmingham that had the charges been the same as those prescribed under the Fees for Inquiries (Standard Daily Amount) Regulations 1988—which I am sure that the Minister has studied—the bill would have been half the size. No reply was received by Birmingham city council to that letter. It was not until a year later, when Members of Parliament wrote, that the Minister's predecessor replied.

The House would have expected that on discovering the error the Government would have ensured the widest possible consultation with the associations and with individual councils so that they could implement the proposed changes, going through in great detail any proposals of legislation—but not a bit of it. In February 1994, just under a year ago, the Association of Metropolitan Authorities received a letter from the Department of the Environment referring to "some doubts" over Ministers' powers to make charges. The letter also said that "to clarify the situation" the Government intended to introduce retrospective legislation shortly.

The AMA, after consulting its members, sent a reply via Mr. Phil Harper, who wrote to the DOE objecting to the Government's proposals, especially their retrospective nature, and arguing further that in future the costs of the inspectors should be borne by the Government. The AMA received the letter from the DOE on the same day as a written answer appeared on the same subject—17 February.

More evidence of the Government's unwillingness to consult—the Minister has spoken today of consultation with the authorities—came in a letter from Mr. D. Donaldson who works in planning division 4. Mr. Donaldson was responding to a letter from the Association of District Councils dated 1 November 1994. It took six weeks to reply to that letter. Millions of pounds of local taxpayers' money has been illegally grabbed by the Government. Mr. Donaldson, no doubt under ministerial instruction, says in paragraph 2 of that letter: While we understand the reasons for the Association's concern, the Department does not accept that there has been a 'significant legislative error'. If that is not regarded as a significant legislative error requiring retrospective legislation, I wonder what is. In paragraph 3, Mr. Donaldson says: The proposed legislation would be retrospective in order to validate payments which authorities have already made and to achieve equitable treatment for all planning authorities, irrespective of the time when their particular local plan inquiry was held. So, the Government want to be fair and equitable to all concerned. They are not going to rob Peter to pay Paul—they are going to rob both Peter and Paul.

In all the consultations carried out so far, not one local authority feels that the principle of retrospection should apply. If the Act is passed, they will want payment to start from the time when the Act is passed, not from a previous decade. The local authorities say that that is a fair and honest way to proceed and the Labour party agrees.

The Minister has told us that in his view £4.5 million up to the financial year 1993 and £1.4 million up to the financial year 1994 was owed by local authorities. Just to set the mind of the hon. Member for South Hams (Mr. Steen) at rest, it is not a question of Birmingham council not paying or refusing to pay up. There is no legal authority and there was no legal authority for the councils to pay at all. I am sure that the hon. Gentleman would not want to pay a bill when he had no legal authority to do so. The bills were sent when there was no authority to do so.

I am glad that the Minister was able to take advice and tell us about the interest. But we are not talking only of a global sum of some £7 million. For local councils these are very large individual sums. For example, Chichester will have to pay almost £20,000, Rochester £17,000, and Reigate and Banstead £75,000. I have not chosen examples of hotbeds of socialism. However, I have to throw in my local area of Leicester, which will have to pay £40,000. Individual councils will have to receive and then pay back a very large sum of money.

On learning that there was no legal authority, the Planning Inspectorate refunded payments to local councils, informing them that the money would be clawed back when the legislation was passed. It must have been like a scene from the Keystone Cops. Each Minister in the Department of the Environment must have been given the responsibility of going in a fast car full of cash to hand it back to the town halls. Bearing in mind the Minister's fondness for privatisation, they perhaps engaged Group 4, or even Mr. Damon Hill, all with the same instructions: drive fast, do not stop, and if apprehended, blame it on the lawyers. I can just see the cartoon in next week's Municipal Journal. It would be farcical if it were not so tragic—what a way to run a Department.

We are very concerned about the scope of the charging regime. The proposed new section 303A(4) would allow the Secretary of State to recover the entire administrative cost of, or incidental to, the qualifying inquiry, so far as borne by him". That appears to go well beyond the "remuneration and allowances" provision in the Town and Country Planning Act 1990. It appears that the Secretary of State is seeking to recover costs other than for those of appointing an inspector. When the Under-Secretary of State for Scotland replies, I hope that he will give us the cast-iron assurance that there is no intention to make charges over and above those made in the past.

Mr. Rooker

Perhaps my hon. Friend will press the point that, with regard to new section 303A(4), in addition to the amount for an inspector, the Government intend to charge for the overheads of the Department of the Environment. What on earth have the DOE's overheads got to do with appointing an inspector with a dedicated staff and a dedicated task in mind? Why should local authorities bear a share of the costs of the DOE's overheads?

Mr. Vaz

I am most grateful to my hon. Friend. I expected him, the hammer of the poll tax and the Opposition Member who did most to bring down that hated piece of legislation, to spot that. The proposal goes far beyond what was originally intended and far beyond the 1990 Act which refers simply to "remuneration and allowances". I hope that the Minister will give us the assurance that we need when he replies.

I believe that there is a clear need to cut the costs of inquiries. Research commissioned by the DOE showed that local inquiries can cost as much as £170,000 for local plans and £300,000 for unitary development plans. The executive summary of the "Efficiency and Effectiveness of Local Planning Inquiries" stated that some of its recommendations were intended to provide more certainty for local authorities and others in budgeting time and ensure that a more businesslike relationship should exist between the local authority and the planning inspectorate. The summary document was issued for consultation on 10 November 1993. The DOE said on 21 December 1994 that the full report would be published "imminently". When the Minister replies, I hope that he will tell us the date of the report's publication. He will know that one of his colleagues said on 17 February that the report was to be published "shortly". We await the proposals with interest and wonder why it has taken a full year from executive summary to the final report. We should like to hear how the Government propose to improve the local plan process. It should not be just a booking exercise; it should be much more substantial.

Another and equally important argument goes to the heart of this matter and relates to the very principle of whether local authorities should have to pay in the first place. There is a view that, as a council is obliged by statute to prepare the plans and to hold the inquiries, the financial burden should be borne by the Government—[Interruption.] I notice that that view has found favour among Conservative Members. I am delighted that they agree with the Association of Metropolitan Authorities which holds that view.

Other organisations take a different view. The Royal Town Planning Institute considers that if the Government paid the cost of the inspectors that might lead to a return to the pre-1968 situation of central Government having the final say in the adoption of local development plans. The institute believes that that would not be in the interests of effective planning or local democracy.

The point is that this legislation, far from being a "wee Bill", as the Under-Secretary of State for the Environment described it, to be shoved through when no one is watching, gives us an opportunity to examine carefully a very important point of principle. We should listen to the views of the interested parties before we take a final view.

The Opposition believe that once there is a statutory basis for charging, the relationship between the council and the inspector should be formalised. It should be that of purchaser and provider. I am sure that the Minister recognises those words as he was very keen to push them forward in Wandsworth.

At present, the basis of a council's dealings with the inspectorate are open-ended in favour of the contractor. The client—the council—has very little, if any, control over the outcome in terms of the delivery date or price. The inspectorate should be required to give, and abide by, its estimates. A written statement should be provided in advance based on the circumstances of the case with any factors affecting variability—for example, sitting days—clearly identified.

There should be provision for arbitration which is binding on both parties. There should also be a mechanism for challenging a demand which a local authority considers unreasonable. Under the provisions in the Bill, the Secretary of State can merely recover the costs through the courts. There should be proper regulation to ensure that the contractor's position of power and monopoly is not abused. That is entirely in line with the Government's wish to see the inspectorate as a trading agency.

We believe that there is considerable scope for improving the operation of the inquiry scheme with regard to the greater use of written objections and shorter reports and developing a more informal approach with the local authority taking the lead in bringing objectors' concerns forward more effectively. Because of the new-found importance of development plans, it is always possible for particularly well-heeled objectors to delay the process to get their point across because they can afford expert representation. The costs of the inquiry will therefore spiral.

We believe that planning authorities should involve local people in preparing plans at a much earlier stage. It is essential that the public are able to participate as early as possible. I was very impressed by the observations of the Royal Town Planning Institute on the Government's initial proposals. I do not believe that any hon. Member would disagree with the comments of Jed Griffiths, the senior vice-president of the institute, who said: We need to get local people involved right at the roots of the planning process so that they can play a real role in shaping the future growth of the places where we live. I am announcing today the establishment of a Labour party review of planning law. I hope that we will consult widely with all interested parties to make planning law a much more consumer-friendly part of legislation and the planning function much more understandable by local people. I want to see planning by local people for local people and planning for prosperity—the prosperity of local people in local areas.

Mr. Steen

In his interesting speech, which I have been following very carefully, is the hon. Gentleman suggesting that parish councils should have planning powers?

Mr. Vaz

No, I am not. Far be it from me to stand at the Dispatch Box and reorganise local government. However, there is no reason why members of parish councils should not feel that they have a role to play as members of the public and go to meetings and participate in the process.

The Government have been caught with their hands in the pockets of local authorities and we all know what happens to pickpockets. If the Government had charged the private sector without lawful authority, there would rightly be an outcry and Ministers would have to cough up and apologise. No wonder, simply to cover ministerial backs, the Bill explicitly states: The Bill will have no effect on businesses as regards compliance costs. In our view, the Bill is bad and it has been drafted in haste. The Opposition have been given an assurance through the usual channels that before the Bill goes into Committee there will be a period of consultation with the associations and other interested parties. We shall hold the Government strictly to that promise. We shall therefore not vote against Second Reading today, but if we find that the Government are not prepared to consider their position on the issue of retrospection and are not willing to accept the reasonable proposals that we shall set out in Committee, I can assure the House that we shall be in a bare-knuckle fight with the Government in the later stages.

It would be improper for the House to allow the Bill to pass before the Government are rightly condemned for their actions and are able to apologise for what has happened and it would be a negation of our duty as an Opposition if we allowed the measure to reach the statute book in its present unfit and unjust state.

4.48 pm

Mr. Anthony Steen (South Hams)

After the successful passage of the Deregulation and Contracting Out Act 1994, the Government's principal new year's resolution must surely have been absolutely straightforward: "We just won't introduce new, unnecessary legislation. We will positively discriminate against passing any new laws which are not proved to be absolutely necessary." After all, that would be entirely consistent with the recent resolution of the House to reduce the number of hours that Parliament sits. Surely, if the House sits for fewer hours, prima facie it should pass fewer laws. Unfortunately, this is only the third parliamentary working day of 1995, and the House, believe it or not, is scrutinising a seemingly additional piece of legislation and adding it to the thousands of edicts that we churn out every year, many of which are entirely unnecessary.

Rather like habitual smokers, too many Ministers and their officials seem unable to resist the temptation to participate in their favourite pastime—passing laws. In most people's eyes, that is the justification for Parliament's existence, for, if we are not passing laws, what are we doing, they say. Whether laws are necessary does not seem to be questioned. Passing laws has become an end in itself, and the lifeblood and justification for the existence of Parliament. If we do not pass laws and we do not debate, we cannot justify our existence.

The addiction now has such a great hold that it seems to have affected not only Ministers of all rank but civil servants, whose modus operandi seems to be entirely dictated by how much legislation they can get their Minister to pass and how many columns of Hansard and how many lines on the statute book they can fill. Are the Government proposing a performance-related bonus for civil servants according to how many lines of legislation they put on the statute book?

The Bill is about the Government recovering from local authorities costs attached to certain inquiries. The inspectorate and the reporters unit has always charged for the costs involved in development plan inquiries. Indeed, even without any statutory basis, local authorities have paid up without much problem, to my knowledge, other than in the significant Birmingham case.

Why did Birmingham challenge the legal basis of charging? As I recollect, it questioned it because the planning inspector was extremely dilatory in delivering his report. Birmingham said, "If you are charging us for this report, we would like it promptly. If you do not give it to us promptly, we will withhold payment." That seems to be a perfectly legitimate argument.

In short, the existing system has worked well, even without statutory force. Therefore, one must ask: "What are the benefits of moving from a successful consensual agreement to a formal legislative framework?" Why take up the time of the House? Why increase legislation on the statute book, with all the associated bureaucracy? Why do we not leave matters voluntary? That is what the Conservative party is all about.

Has the Birmingham challenge led to a flurry of similar cases from other local authorities? I do not believe that it has. The Government, not local authorities, have reacted. If there has been such a flood, it may be because of unconscionable and unreasonable delays in producing reports. It is a bit rich to clobber local authorities with a statute compelling them to pay if, at the same time, there is no local authority charter.

I wonder whether my hon. Friend the Minister will think about a local authority charter which would ensure high standards of practice and which must include the prompt production of reports. It seems perfectly right that a local authority, if it is asked to pay for such reports, can say that there must be a charter which says that reports must be produced in two months, or there will be a reduction in charges made—just as, under the charter, one receives 20 per cent. back if a train arrives more than an hour late.

There is another question: should charges be imposed at all? The hon. Member for Leicester, East (Mr. Vaz) touched on that point. Local authorities are obliged to prepare plans. That is the law. However, whenever plans are drafted, individual objections from local people are bound to follow. That is our democratic process, which we encourage. An examination in public is therefore inevitable.

I was a member of the Standing Committee which considered the Planning Compensation Act 1991. I was particularly enthusiastic about that legislation, which made it the statutory responsibility of every authority to draw up a local plan and to keep it up to date. Since 1991, such plans have had enhanced status, as the hon. Member for Leicester, East mentioned. The aim of local plans is to ensure that authorities develop their areas according to a rational process, with the fullest public consultation. That is what local accountability is all about.

What happens? The Government actuaries in Holborn, using the most modern technology, analyse the demographic profile of regions and projects and see what is required in the next 10 or 20 years. They have what might be described as a crystal ball in Holborn. They look into it and ask, "What is required in each region of Britain? How many houses, schools, hospitals and roads are needed?" They produce a picture from Holborn—I do not know why it is from Holborn, but that is where they seem to be—and they present it to the Department of the Environment. Estimates are produced, based on their demographic profiles of births, divorces, deaths, employment figures and so on. At the end of the period—abracadabra—they say how much is required in each region of the country.

For example, in respect of Devon—my area—the actuaries say, "We should have another 60,000 houses by the turn of the century." They then ask, "Why 60,000? Let's make it 90,000 houses." In the south-east of England—I do not think that anyone has an idea how many houses there will be in many Conservative constituencies—there will be nearly 1 million more houses by the turn of the century.

That is what those people in Holborn are doing, looking into their crystal ball. In fact, if there are 960,000 more houses in the south-east of England by the turn of the century, it will be a continuous urban area. It will be a suburban area. There will be no countryside from London to Brighton.

Mr. David Nicholson (Taunton)

I stayed in the Chamber to hear my hon. Friend, because what he says is usually good value. He raises an important subject. He will be interested to know that the Somerset branch of the Council for the Preservation of Rural England, an organisation which would not oppose the traditional conservatism that my hon. Friend and I support, has written to me suggesting that the assumption that previous tendencies of people to migrate, particularly to retire to the south-west, should now be questioned and that housing and other developments should also be questioned. The south-west of England, which my hon. Friend and I represent, would otherwise be greatly disadvantaged by the developments that might follow.

Mr. Steen

It was very kind of my hon. Friend the Member for Taunton (Mr. Nicholson) to make such gracious remarks about my contributions in the House. May I make, similarly, a comment about his interventions? They are well known always to be of very good value and of very good sense. My hon. Friend is absolutely right.

The Government are advised by civil servants in Holborn, who are very brilliant, wear glasses and gaze into crystal balls, and who believe that there should be 60,000 more houses in Devon and nearly 1 million more in the south-east. At the end of the relevant period, they get the houses, because planners and politicians build the houses, and they say, "There we are, we told you that they were needed." That has been happening in Somerset, Devon and the south-east.

I question the assumption that is made, and I also question the process. Planners and politicians do great disservice to our local communities by burdening them with more homes, schools, hospitals and roads than are needed. They distort migration patterns in this country by building those houses.

Mr. Vaz

Does the hon. Gentleman consider that the Government should bear the costs of a local inquiry?

Mr. Steen

That is the thrust of my argument.

My modest local South Hams district council is one of the best in the country, and is regularly mentioned in dispatches as providing good value for money. I am questioning why, if the Government are committed to the democratic process and to consultation and have passed an Act saying that local plans must be drawn up, they do not pay part of the cost. I question that concept.

Sir Paul Beresford

I have made it plain twice to the hon. Member for Leicester, East (Mr. Vaz) and others that, through the standard spending assessment and the RSG, the Government have done that, and continue to do so.

Mr. Steen

I do not think that I should get involved in a discussion between the occupants of the two Front Benches as to who should pay. However, there is a point—

Mr. David Nicholson

Would my hon. Friend be interested to know that West Somerset district council, which covers part of my constituency and is Conservative and independent-controlled, has written to me expressing the same concerns and suggesting that, if the costs of inquiries are to be changed as a result of the Bill, that fact should at least be reflected in the SSA? The council also made the same point as my hon. Friend and the hon. Member for Leicester, East (Mr. Vaz) about retrospection.

Mr. Steen

Those are all good points, and I know that the Minister is aware of the issues, as he is one of the Ministers with the most experience of local government. Having heard what my hon. Friend said about West Somerset council, which is not a hotbed of left-wing socialism—at least, not at the moment—I am sure that, when the Under-Secretary of State for Scotland winds up, he will be extremely circumspect. With discussions through the normal channels, I am sure that some improvement can be made.

What I am saying—I hope that it is of some help to the House—is that the Department of the Environment hands down the housing allocations it believes necessary for the county, rather like Moses with his tablets. The county then offloads the numbers on to the district or city council. There is then an argy-bargy between the district and the county about where the exact numbers are to go. Revised numbers are then sent back to the Department for approval.

The whole process is therefore triggered by the Government sending down a diktat that so many new homes and new roads are to be built, and so much new employment is to be found, and then that there must be so many schools to deal with the children who will live in the homes, so many hospitals to deal with the elderly and the ill who will live in them, and so on. Local inquiries arise because Government have initiated the process.

If things were otherwise, local plans would be development programmes based on what local people felt could be managed locally. What we now have is the opposite—a reaction to a Government edict handed down to the county for consideration by local people. The flow is from the top downwards, not from the local people upwards. It is therefore not surprising that, when local people are faced with a Government proposal for an influx of new construction, they lodge objections and rightly demand an inquiry. Why should local authorities pick up the whole tab for that process, which has been instigated by central Government and their officials?

The Government must think about that again—not only about the fact that local participation in matters for which the Government have been a catalyst is penalised, but about the wider attitude towards legislation. The beginning of 1995 should have been a time to signal that we have learnt the lessons of the past and we shall halt the passage of new legislation. Yet here we go again with more legislation. There is always a good reason for it, no doubt, but there is no point in passing a major Act of Parliament saying that we will deregulate and reduce the existing level of legislation if we then pass new legislation to take its place.

There seems little inclination or inducement to get hold of this virulent disease by the short and curlies and stop the legislative machine grinding out more and more laws. The reason is simple: Ministers' careers depend on passing laws. The more laws they pass, the more credit they get, and they move up the ladder. That is how the whole system works. No wonder the deregulation process is in difficulties. If a Minister does not come to the House with legislation to pass, he is considered inept and unenthusiastic. "What is he doing?" people ask, and he will be out.

The House is sitting for fewer hours now, but that will have virtually no impact on the growth of statute law that makes us one of the most over-governed, over-bureaucratic nations in the world. It is no good complaining about the nanny state if we do little to curtail its all-pervasive and all-embracing nature.

5.4 pm

Mr. Bill Olner (Nuneaton)

The Minister said that the Bill was merely technical, but for me it is much more than just a technical Bill. I speak as someone who was the chairman of a planning committee for six or seven years many moons ago, and I know the delicate balancing act that planning authorities, whether at district, county or city level, have to perform week after week and month after month. I am sure that the Minister, with his local government experience, knows it too.

I well remember local plans being drawn up, especially in my constituency. That was a mandatory requirement on local planning authorities. Because of his local government experience, the Minister will also know that there are two conflicting forces acting in any planning matter. One is the local population, who may not want expansion in their area; theirs is a legitimate grievance. The other force, which is becoming more difficult for local authorities to deal with, is that exerted by people with large tracts of land who want to develop them against local authorities' wishes.

What brings some democracy and equity to the process is the fact that there will be a planning inquiry. I shall say more later about the retrospection, and whether a charge should be made in the first place, but I believe that it is an affront to the democratic process to charge anything for those due processes to be carried out. Among the facts to come to light at the planning inquiry will be the pressure that local authorities now have to face, especially from well-heeled planning applicants.

When such a person makes a planning application, the local authority by due process may refuse it on legitimate grounds. I know that I am straying slightly off the point, Mr. Deputy Speaker, but I shall attach what I am saying to the main theme. When a planning application is refused by the local authority, it may go to appeal and the inspector may approve it, overturning the local authority's decision. The local authority may then have to pay a considerable sum to the applicant.

I hope that the Minister will understand that, in the planning committee, at the back of the ordinary local councillor's mind is the fear that, when a powerful person with plenty of money makes a planning application that local people do not want, it is getting more difficult to refuse, because in the end there may be a financial penalty for everyone else to pay.

The planning system is based on democracy and on local people having an input. That is why the statutory mandatory requirement for local plans and unitary development plans should be funded directly by the Government. It has all come about because the Government, especially the Department of the Environment, have been found to be acting without due process of law. The Government should not have been charging what local councils had to pay for public inquiries in the past.

It is ludicrous that the Government should seek to legitimise their errors of the past in this way. That goes against all natural justice. I do not know whether my own local authority has a financial interest in this or whether it has paid out money for this purpose, but it is incensed that the Government seem to be acting illegally by bringing before Parliament a Bill to legitimise their past actions.

Even worse, the Government are trying to make the legislation retrospective. Until one of his colleagues pulled him up, the Minister kept talking about RSGs. I thought that the rate support grant went out with the poll tax—

Sir Paul Beresford

Revenue support grant.

Mr. Olner

Whether we talk about RSGs or SSAs, we would be hard pushed to find any local authority in the United Kingdom that could identify within its SSA any money given it for this purpose, so that it could pay the money back should there be a need for a local inquiry. I do not believe that any such money has been given to local authorities.

I fear that this is the thin end of the wedge. The Bill details charges for the inspector and his officials and for other costs. All that breaches the principle of free planning inquiries. In future, they will have to be paid for when a planning inspector is involved. That will erode the democratic right of communities to lodge planning appeals. I therefore urge the Government seriously to think about the legislation again.

I wish now that, when I told my hon. Friend the Member for Leicester, East (Mr. Vaz) yesterday that I wanted to speak in this debate, we had decided to force a vote on the Bill—especially having heard what other hon. Members have had to say about it since then. Few of them seem to favour this piece of legislation.

5.12 pm

Dr. Ian Twinn (Edmonton)

We have heard a remarkable speech by the hon. Member for Leicester, East (Mr. Vaz). He wrongly blamed the Government, who he said demanded illegal payments from local authorities. On the contrary: it was the Labour Government who brought in the original legislation, which was presumably carefully thought through and scrutinised by the House of Commons. For more than 20 years local authorities and the Department of the Environment have been implementing the will of the House, which was that local authorities should pay the costs of planning inspectors—

Mr. Vaz

The hon. Gentleman has got it wrong. It was not the will of Parliament that the charges should be borne in that way. The will of Parliament was that no charges should be made.

Dr. Twinn

The hon. Gentleman deliberately misunderstands me. It may be his job as a lawyer to play with words, but let us keep to the simple truth of the matter. At the time, Parliament thought that it was asking local authorities to pay these costs, since when the Department of the Environment has asked local authorities to pay them. They in turn believed that that was the law and were content with it—until Birmingham discovered that it was not the law. I do not blame Birmingham for finding out that what everyone thought was the law actually was not, and then exploiting that fact.

Unless we pass this Bill, to restore the status quo ante, we shall have to adjust standard spending assessments to recoup the money that local authorities have been allowed against paying for these costs.

I do not agree with Opposition Members who think that a point of principle is at stake and that it is right that central Government should pay the whole cost of the planning inspector; nor do I agree with my hon. Friend the Member for South Hams (Mr. Steen). He should beware of his own arguments—

Mr. Steen

They were good though.

Dr. Twinn

I do not agree. My hon. Friend is worried about civil servants in the DOE inflicting population growth on his area. I share that concern, because I represent a suburban constituency in London, restricted by the green belt, and development is thrust back on us because the shire counties do not want it. We have no choice but to become town-crowned because of that.

I should like local authorities to have a certain amount of freedom to speak independently. He who pays the piper calls the tune. If my hon. Friend suggests that the DOE picks up the tab, I suspect that we shall gradually accept the principle that the DOE has every right to dictate what the result of an inquiry should be. At the moment we have a nicely balanced system of local planning inquiries; the DOE Planning Inspectorate supervises it, but the process is independent. The DOE does not interfere with the contents of the reports, but inspectors report back their draft recommendations to local authorities, which then have a chance to feed through their views to the inspectors.

This is a pleasant and useful system in which local authorities pay for the inspectors' time and in return expect to have some say in the interpretation and presentation of the reports.

Mr. Steen

What I am really saying is that we do not need this Bill. We can simply rearrange the SSAs to deduct some money from local authorities. If we are the party of deregulation we must not pass more regulations.

The independence of the process is not affected one way or the other, because either way the Government pay for it—by sending out the bill and getting the money back, or by deducting it from SSAs.

Dr. Twinn

I always hesitate to discuss the complexities of local government finance, although I used to understand it when I taught it. I certainly do not understand all its details today. This week I went to see the Secretary of State at the DOE with the Labour leader of Enfield council to talk about this year's SSA, and I understood less at the end of the meeting than I did at the beginning.

We should not make SSA calculations more complicated than they already are. I would rather stick with the principle that local authorities be paid a lump sum which they can decide how to spend. That sum should include an amount representing the cost of employing a planning inspector. This legislation is necessary to return the situation to what we thought it was before Birmingham discovered that it was not.

If local authorities really are concerned about the rising costs of local public inquiries, perhaps they should look more carefully at how they develop their local plans—that might be more productive. I agree wholeheartedly with the hon. Member for Leicester, East about the need for more public participation and consultation. If we involve more groups of people earlier in the planning process, it is much more likely that local plans will emerge with local consent and that there will be fewer objections to them. That will lead to cheaper inquiries.

I also agree with what the hon. Member for Leicester, East said about the Royal Town Planning Institute, which has pointed out that we might have expected an earlier response from my right hon. and hon. Friends at the DOE, following consultations on the document, in respect of improving local plans. We might have expected the introduction of more formal agreements between local authorities and planning inspectors about the format and costing arrangements for inquiries.

If that were something on which Front-Bench Members on both sides of the House would get together while we await the Bill's consideration in Committee, I would wholeheartedly approve. If something were put into the Bill to allow a new agreement between the Planning Inspectorate and local authorities, we could improve the system and address some of the concerns that local authorities genuinely have. For example, an inspector might fall ill after his inquiry and not produce the report. The local authority might be faced with the cost of a second inquiry, which would be completely unreasonable. So there are concerns for my hon. Friends on the Front Bench to answer.

The principle of the Bill is that local authorities should pay for the costs of planning inspectors. We should go back to what we thought that the previous Labour Government had passed in 1977. The Bill should be welcomed by the House and passed.

5.20 pm

Mr. David Rendel (Newbury)

I do not intend to detain the House for long, as I believe that most hon. Members are in agreement with the general principle that it is right that local authorities should pay the costs of plans and the inquiries that go with them. I also recognise that a number of the points that I might have made have been made already by other hon. Members; it is important that we should all learn not to repeat ourselves too frequently and I hope not to do that this afternoon.

There are one or two points, however, that need to be added to the debate. One point that was mentioned by more than one hon. Member is whether there will be any extra costs as a result of the Bill. The Minister gave us some assurance that, as far as the inquiries that have already taken place are concerned, no extra costs will be added to those that are now charged to local authorities. He was, perhaps, a little bit woolly on the question of interest, but I hope that he will clarify that later.

The Minister was fairly clear that there would be no extra costs, but was less clear on whether they would apply to all future inquiries as well. That point has already been raised and I ask the Minister to give assurance that, in future, perhaps as a result of the consultation that he has promised us between the Bill's Second Reading and its consideration in Committee, costs charged to local authorities for inquiries will be along precisely the same lines as those traditionally charged and that no extra costs will be added.

It is, of course, true that plans and inquiries are becoming more difficult and complex all the time, partly because of the number of objections to them nowadays. That is not entirely unexpected, because the amount of money that is involved in development permissions is very great and we must expect that many people will be concerned to ensure that the inquiries produce the result that is financially beneficial to them; not only the small man who, perhaps, wishes to amend or improve his house in some way but some of the larger vested interests that have a lot of money that they can apply to the costs of getting involved in inquiries.

It is also true that inquiries are about plans, which, every year, become more important as the Government insist on them being followed more strictly and give greater weight to what is in structure plans or local district plans. That means that the pressure on people to take part in inquiries, to involve themselves and therefore perhaps lengthen an inquiry, is growing all the time.

Inquiries are unpredictable. It is difficult to tell how long an inquiry will take and therefore how much it will cost. That makes it difficult for local authorities to budget sensibly for the costs of their inquiries. One of the points made to me by several local government officers is that no choice is allowed in who is to be the inspector for any inquiry. While I would not like to see local councils given the right to choose their own inspector so that they might, perhaps, choose one whom they knew would give them exactly what they wanted, there is an argument for saying that some element of choice should be allowed. After all, one would have thought that the Government themselves, with their reliance on market forces, might give some credence to the idea that, if local authorities were allowed to choose between inspectors, they would be more keen to choose one whom they knew to be more efficient and effective and who would run their inquiries well. Perhaps those who were found to be less effective in the past would be less likely to be asked to undertake inquiries in the future. Some element of market forces in that way might be rather attractive to the Government. I hope so.

We need some form of guidance about what to expect from our inspectors. The Government are keen on charters at the moment. Perhaps there should be an inspectors charter, which would lay down some ground rules on how they would work and what local authorities could expect from them.

The point was made by the hon. Member for Leicester, East (Mr. Vaz) that the Bill is a missed opportunity. He thought that there was a chance to include some ways of amending and improving the whole local planning process. I, too, would like to know when the Government expect to announce the improvements, which, perhaps, they hope to make as a result of the consultation. That has not yet been announced and we would very much welcome an early announcement.

Perhaps most importantly, there is a great failing in the present planning system in that there is very little opportunity for the small man to have a real say. The large organisations, which are well funded and the local authorities themselves, which are comparatively well funded, have a much better chance of getting their way in an inquiry than the small individual who perhaps does not have the money or expertise of the big boys. That is a basic and fundamental flaw in the present planning system and we need to seek ways to overcome it. There is some opportunity for local authorities to do that, and I am proud and happy to say that my own Liberal Democrat-run authority in Newbury currently proposes that some money should be set aside to provide expertise for objectors to our local plan. It might seem a rather odd idea that one should try to help people to object to something that one is proposing, but there is a good argument for it, not only on fairness, as that is obvious, but on finance.

One of the difficulties of local planning inquiries and one of the reasons why they cost such a lot is that some of the objectors are not good at setting out their objections. They do not really know how to make their objections well. As a result, it takes a lot longer than it might to go through them to work out whether they are valid. There is a good case for saying that it may save money in the long run if local authorities provided some means for the little man to gain expertise. That can be done now, but to make it more widespread the Government must recognise that need and the fact that it may increase costs to local authorities.

The Minister has already given an assurance that the costs of inquiries will be met through SSAs and local grants. I believe that that cost of giving expertise—or the right to expertise—to objectors should also be met through SSAs and local grants. I hope that that and other potential costs, as the costs of inquiries are met, will be fully met through SSAs. I ask the Minister to give that assurance today.

5.27 pm

Mr. Tim Smith (Beaconsfield)

The hon. Member for Newbury (Mr. Rendel) thinks that the Bill constitutes a missed opportunity, as he would have liked to see attached to it various other rather vague planning provisions, whereas my hon. Friend the Member for South Hams (Mr. Steen) thinks that it is unnecessary and should not have been introduced in the first place, because we should be deregulating and not adding to regulation.

The Bill has the virtue of simplicity. It is clear, straightforward and necessary, because once we discovered that the Government might be acting ultra vires, we had to put matters right. Before Christmas, I sent a copy of the Bill to the director of planning services of South Bucks district council, to ask him for his views. He said that it was his professional opinion that It seems reasonable for local Councils to pay a fair level of costs for the services of inspectors and I think it would be difficult to object to the legislation. I would hope, though, that the levels of charges subsequently fixed by Ministers reflect a reasonable balance between recovering the Inspectorates costs while not draining the limited resources of local authorities. If my hon. Friend looks at page ii of the Bill, he will see that it says that the Bill will have no effect on public service manpower. It will also have no effect on businesses as regards compliance costs. So its regulatory burden is relatively limited. However, I agree with my hon. Friend when he says that we should do everything that we can to ensure that we stop the great tide of legislation.

The director of planning services of South Bucks district council also made a point about recent developments with local planning inquiries. He said that they are becoming extremely long and costly as more and more people exercise their right to object (e.g. the Wycombe plan had more than 500 objections). That raises an important point, to which the hon. Member for Leicester, East (Mr. Vaz) referred. I agree that we should involve local people as much as possible in the planning process and explain it to local people. They do not understand precisely how it works. For example, parish councils have been referred to. Their role is commonly misunderstood. They have no authority over planning matters, yet all the parish councils in my constituency have planning committees. They go through the planning applications and decide whether they should be accepted or rejected.

People say, "Beaconsfield town council rejected that planning application. Shouldn't that be the end of the matter?" One then has to explain that the committee is there only in an advisory role. That involves local people, which is what we want, but it is the district council that is the planning authority.

That planning application may then go to the district council planning committee. If it rejects it, it will then go to the Secretary of State, and his inspector, apparently considering the application on its merits against exactly the same criteria, the same planning guidance from the Department and the same county structure plan and district plan, may come to exactly the opposite conclusion to the parish and district council planning committees. Such an application could relate to just one house, an infill in Beaconsfield somewhere.

How does one explain that a district council planning committee can come to a completely opposite decision on such a matter judged against the same criteria? In the end, such matters become highly subjective. We need to do more to explain the planning process to local people as well as involving them.

There is another aspect that I wish to mention to my hon. Friend the Minister. I have written to him about this, but I feel strongly about it. A number of major developments can be proposed in one relatively small area at the same time, but at the moment the planning process is incapable of taking into account the potential effect of all of them. Each one has to be considered individually on its merits and it is not open to an inspector to consider other applications that may be in the pipeline at the same time.

I have an extreme example of that in the villages of Dorney and Taplow in my constituency. Those villages form a green lung between the conurbations of Slough and Maidenhead; a tongue of green between the two.

Mr. Steen

That will not last long.

Mr. Smith

My hon. Friend is right. It will not last long because of the tremendous development pressure. The Secretary of State has approved a planning application from Eton college for the construction of a rowing lake 2 km long and 0.5 km wide in the village of Dorney. He has also approved a new five-mile stretch of the River Thames that is to be constructed by the National Rivers Authority to benefit the people of Maidenhead who live on the other side of the river. Those two huge planning applications, both involving millions of pounds, were being considered at the same time, but one inspector could not consider the other. In the end, the two were approved.

Now it is proposed to widen the M4 from three to seven lanes in each direction. Again, that proposal will be considered on its merits. The overall impact of all those developments will not be considered by any one inspector. That is a fundamental flaw in the planning system, which needs to be addressed. We need to explain to local people why it arises and what we shall do to address it.

I am grateful for the opportunity to raise those matters because planning, the protection of the environment and the green belt are important issues in my constituency. I have given examples of ways in which people do not understand the planning process. We need to do more to involve them and more to explain the system to them.

5.34 pm

Mr. Jeff Rooker (Birmingham, Perry Barr)

I want to make only a brief contribution and I shall follow the example of the hon. Member for Newbury (Mr. Rendel) by not repeating points that other hon. Members have made.

The more that I think about the Bill, the more I listen to the Minister and the more I study the notes on clauses, the more I realise that the Bill could equally be entitled, "Birmingham Catches the Tory Government Out Retribution Bill". That sums it up.

It has been said that the Bill is needed to put right mistakes made by Harold Wilson's Labour Government in the 1960s, when most hon. Members here now were probably at school. However, I remind hon. Members that the Bill amends the Town and Country Planning Act 1990. Therefore, it is not all the fault of Harold Wilson's Labour Government in the 1960s. It is the fault of the way in which the House of Commons operates. We do not fully scrutinise or understand the consequences of the legislation that we pass. I hope that, with the new mood accompanying the Jopling reforms, we shall pay a little more attention to what we are legislating for.

I should make it clear that Birmingham city council in no way objects in principle to paying for planning inquiries. There is no argument about that. It is an important part of local authority responsibility. A briefing note from Birmingham city council says: However, the principle that the local authority should be responsible for its Development Plan is more important, and the City Council would not wish to argue with the principle of being charged for inspectors services. Another point which has been touched on and which will certainly be raised in Committee and on Report concerns the contractual arrangements between inspectors and local authorities. That matter should be considered in detail. The Bill does not address that, but it can be raised by way of amendment to the long title.

For the local authority to pick the inspector is going a little too far, but there should be some competition. However, these days legislation allows schools to appoint their own inspectors. It is not like the old days, when they had no say in the matter. Therefore, there is an argument for bringing in, if not the full rigours of the market, a degree of competition, particularly in view of the way in which Birmingham suffered—I use that word in a general sense—a vast increase in the inspector's charges just before the inquiry took place. That point cannot be repeated too often.

Furthermore, the inspector's charges on Birmingham, as on other authorities, for a day when visits take place are the same as for when the inquiry is taking place. I understand that that is done to keep the accounts simple, but there is an argument for differential charging.

I regret that I shall not be available to serve on the Standing Committee on the Bill, so I shall make one point now on the detail of the Bill. I have referred to the Department's overheads, but new section 303A(6) in clause 1 suggests that local authorities could be charged for an inquiry that does not take place as if it had taken place. If an inquiry does not take place, it is fine to charge for the set-up and administrative costs, but to be charged on the basis of what an inquiry would have cost if it had taken place is outrageous. I shall leave that point to my hon. Friends on the Front Bench who are far more experienced than I am in such nit-picking and will have the opportunity to do so in Committee.

I have some partisan criticism to make across the Chamber. I have detected some NIMBYism this afternoon. Listening to the hon. Member for South Hams (Mr. Steen), one could be forgiven for forgetting that he was once the hon. Member for Liverpool, Wavertree. I was in the House when he was and he would riot have made that speech then. Then his constituents from Liverpool holidayed in the west country, bringing jobs into that part of the world. They are now being told, "You can't come and live here." That is what he is telling my constituents—people from Birmingham and elsewhere in the west midlands, thousands of whom spend joyous periods in the west country. One of the problems is that the M5 gets blocked up. The countryside of Devon, Cornwall, Somerset and Wiltshire is beautiful and much enjoyed by my constituents, some of whom decide to live in the area. That is their right as citizens, and I do not see why the hon. Member for South Hams wants to stop them.

The issue goes beyond that, however. People who now live in the west country may want their children to have homes, so that they can remain in what has become their county. That will not be possible without new buildings—extra buildings and replacements, which are the same in some senses. At the present rate of replacement, every home in the country has to last about 900 years. Listening to hon. Members from the south-east, one would think that we wanted to concrete the area. Of course we do not. Hon. Members should not use such extravagant language when we are discussing people's homes: people should have a fair amount of choice about where they live, and the extravagant language of hon. Members from the south-east and south-west ruins their case.

Mr. David Nicholson

My hon. Friend the Member for South Hams (Mr. Steen) and I were merely questioning, and suggesting that the House question, some of the rather extravagant demographic predictions made by people in Holborn, which my hon. Friend graphically described.

Mr. Rooker

I was Labour spokesman on housing and construction for about three years. During that time, I discussed whether the south-east and south-west should have new towns or villages, or whether we should go for infills to complete the circles of some of the villages. That arrangement, which would stop the linear flow, seemed much more sensible to me.

When Birmingham first raised the issue early in 1994, the Department of the Environment did not respond. One Birmingham Member of Parliament does not like to be called a Birmingham Member, but nevertheless represents at least 70,000 Birmingham citizens. [HON. MEMBERS: "Name him."] I am referring to the right hon. Member for Sutton Coldfield (Sir N. Fowler). He does not appear on any list of Birmingham Members, because Sutton Coldfield is the only constituency in the city that does not include the prefix "Birmingham". That conveniently allows the right hon. Gentleman to give the impression that he is not a Birmingham Member. I did not give the right hon. Gentleman notice that I would mention him, but I did not think it necessary to do so; in any event, we have engaged in correspondence on the subject.

Early in 1994, the right hon. Member for Sutton Coldfield was masterminding a vicious Tory party political broadcast attack on Birmingham city council. It was proved that every point that the Tories made about the council was a lie. I am not surprised that a block was put on the Department of the Environment. It was a case of, "Well, Minister, Birmingham has caught us out on this planning matter. We must go to the House of Commons and secure a change in the legislation, because we have been illegally—criminally—charging local authorities all over the country money that we had no right to charge them." Ministers at the Department have slagged off Birmingham at virtually every opportunity.

I pay tribute to the Prime Minister for not rising to the bait presented by the hon. Member for Birmingham, Edgbaston (Dame J. Knight), who invited him to attack Birmingham city council again. The Prime Minister has learnt his lesson. When Ministers attack the council, it usually bites back, and we end up with more votes than we had before they began attacking us.

I also pay tribute to my colleagues, the members and officers of Birmingham city council, for what they have achieved. They do not seek to wipe out what has happened in the past or to escape paying charges; they have no argument with what they understand to be a point of principle. They have, however, taken the opportunity to raise other issues, such as retrospection and the contractual arrangements between the inspectorate and the city council. For that, we all owe the council a vote of thanks.

5.43 pm

Mr. John McAllion (Dundee, East)

The Under-Secretary of State for the Environment, who opened the debate, described this as a wee Bill. We have had a wee debate as well, in terms of numbers present rather than quality.

Opposition Members have made excellent speeches, especially my hon. Friends the Members for Birmingham, Perry Barr (Mr. Rooker), for Nuneaton (Mr. Olner) and for Birmingham, Selly Oak (Dr. Jones). I know that their speeches were especially appreciated by my hon. Friend the Member for Leicester, East (Mr. Vaz).

Every speech has referred to clauses 1 and 2, which apply to England and Wales. As a Scottish Member, I dare not comment on those clauses in any detail. As Conservative Members may know, we in Scotland have a separate planning system and, indeed, a separate system of local government; we even have separate central Government machinery in the form of the Scottish Office, which spends more than £14 billion a year in Scotland—unaccountably—and employs more than 7,000 civil servants.

We are so different that we have not only separate clauses in Bills of this kind but, in some instances, separate legislation and a separate Committee structure in the House of Commons. The Under-Secretary of State for Scotland, who is present, knows that Scottish Office Ministers have even introduced a range of innovative procedures that demonstrate the distinctive way in which Scotland is treated in the House. I believe that all that justifies Opposition Members' case for a Scottish Parliament: clauses 3 and 4 should really be debated not here but in the Scottish Parliament that a Labour Government will set up after the next election.

None the less, I welcome the opportunity to debate the Scottish clauses, especially clause 4. [Laughter.] Since I became a Front Bencher I have not had many opportunities to debate any variety of clause 4. I also thank the Under-Secretary of State for Scotland for the briefing with Scottish Office civil servants that he arranged earlier today, which I attended, about the Scottish part of the Bill.

Will the Under-Secretary confirm that the only plans in Scotland that will be affected by the Bill are the local plans of district planning authorities? The Minister who opened the debate referred to structure plans in Scotland, but I should like a Scottish Office Minister to confirm that they will not be affected.

In theory, the Bill covers the proposals relating to simplified planning zones in Scotland. Will the Under-Secretary confirm, however—as there have been no inquiries about the provisions in that regard—that those provisions will not be affected either?

The Minister who opened the debate said that clauses 1 and 3 would have the same underlying objective and effect—clause 1 in England and Wales, and clause 3 in Scotland. If that is so, will the Under-Secretary explain the different language used in the two clauses? Clause 1 refers to the entire administrative cost of the inquiry being recovered, but clause 3, which applies to Scotland, refers only to the Secretary of State for Scotland having regard to the general staff costs and overheads, and to general administration costs. According to the notes on clauses, the full cost to the Scottish Office will be recovered, but I should like the Minister to explain the difference in the language, and tell us whether that difference implies any difference in the application of the clauses to the respective countries involved.

Paragraph 94 of the notes on clauses states that some Scottish local authorities have asked the Secretary of State for Scotland to repay the sums that he collected illegally from them. In his introductory remarks, the Minister said that that was not so. I should be grateful if the Scottish Office Minister would clarify the position: have any Scottish local authorities asked for that money to be repaid? If so, which authorities were they? If any authorities were to make such a request, what response would they receive from the Scottish Office? If the money was repaid, what would be outcome if the Bill were enacted? Would they be required to pay the money back to the Secretary of State for Scotland?

Clause 4 requires Scottish local authorities to repay to the Secretary of State for Scotland any sums that have been returned to them by the Secretary of State. It appears that, unlike for England and Wales, there is no provision in clauses 3 or 4 for recovery in Scotland of that sum as a civil debt. If it was necessary to give the Secretary of State for Scotland the power to recover money from Scottish local authorities, why has it not been considered necessary to give him the means to recover it? Why is there no civil procedure for the Secretary of State for Scotland to recover that money, as there is in England and Wales? If he wants the money back, how will he set about getting it?

The Bill's origins lie in a House of Lords ruling, which I suppose was within the context of English law. Has that ruling any force in Scotland? Is it likely to be tested in the Scottish courts? More important, if the ruling were contested by a Scottish local authority, how would that affect the Scottish provisions of the Bill? Would the clauses be suspended while that case was tested in the Scottish courts, and if the Bill's Scottish provisions were suspended would the provisions of the whole Bill be suspended? I should be grateful if the Minister could make that clear.

The Bill confirms that since 1968 successive Labour and Tory Governments have acted illegally. The point is not to try to lay blame and say whether a Labour or a Tory Government were originally at fault. The reality is that Governments of both parties have made charges to local authorities for which there was no statutory provision.

The Government have been in power for almost 16 years and would have carried on making illegal charges to local authorities without the intervention of Birmingham city council, to which the whole country is indebted. Will the Minister confirm that if local authorities had acted in a fashion similar to that of successive Governments they would not have received the same sympathetic treatment? Would they have been allowed to keep or reclaim the money that they had collected illegally? Would they have had the benefit of retrospective legislation? The answers to the questions are obvious. Local authorities would not have been allowed to get any money back, nor would they have been given the benefit of retrospective legislation.

Why do not the Government simply accept that central Government have made a mistake, that they should pay the price for that mistake and that they should repay to local government the moneys that they collected from them illegally?

My hon. Friend the Member for Leicester, East spoke of the dangerous precedent that has been established in that respect. It seems that local government payments in Scotland, England and Wales can be legitimised by subsequent legislation. That means that retrospective local government legislation is now an acceptable way of handling that. If that is so, the Government are establishing a dangerous precedent.

My hon. Friends have promised the Government a bare-knuckle fight in Committee and on Report. I accept that the Bill has much less serious implications for Scotland than it has for England and Wales, but my hon. Friends may be assured that they will have the support of every Scottish Labour Member in that fight with the Government.

5.53 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

The Opposition reply to this interesting debate was opened with considerable rhetorical flourish by the hon. Member for Leicester, East (Mr. Vaz). I agree with the analysis of the Bill by the hon. Member for Dundee, East (Mr. McAllion). It is correct to say that for 21 years successive Governments have been working on a certain assumption, as have local authorities north and south of the border.

As hon. Members have recognised, everyone was acting in perfectly good faith until the matter was challenged in the courts by Birmingham city council. I tell Birmingham Members that I certainly make no criticism of Birmingham city council for doing that: it had the right to do so. As a consequence of its action and as a result of the Government responding quickly and decisively, an area of considerable doubt will be clarified.

I confirm the reference by the hon. Member for Leicester, East to consultations with local authority associations before the Bill goes into Committee. I understand that that is a matter for discussion through the usual channels. The hon. Members for Leicester, East and for Newbury (Mr. Rendel) and other hon. Members mentioned the scope of costs to be recovered by the inspectorate. I reassure the House that there is no intention of increasing the costs to be recovered from planning authorities. In England, the amounts recovered will be the inspector's salary, travel and subsistence costs and the inspectorate's administrative support costs. Those sums will be specified at a composite daily rate in regulations to be made under powers in the Bill.

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) spoke about costs being incurred when an inquiry did not take place. That applies when a planning authority starts the process of a inquiry and then decides not to have one. The other detailed point was made by the hon. Member for Dundee, East, who said that the respective provisions north and south of the border differ. They differ not in intent or objective, but because the travel and subsistence costs of reporters in Scotland are paid under a different Scottish planning Act that does not apply south of the border.

My hon. Friend the Member for South Hams (Mr. Steen) spoke about the local authorities charter. In England and Wales, the Planning Inspectorate will begin to offer a service agreement to each authority after a draft agreement has been discussed with local authority associations. That will specify a certain level of service that the inspectorate will aim to achieve.

My hon. Friend also made a number of points about the effect of the planning system in the south-east and the south-west of England. He said that he thought that I would be circumspect in responding to those points in my speech. He is correct. I propose to be extremely circumspect and will just say that the Under-Secretary, my hon. Friend the Member for Croydon, Central (Sir P. Beresford), has listened carefully to my hon. Friend and to other hon. Members who have rightly used the opportunity to make some more general comments on the planning system.

My hon. Friend the Member for South Hams said that Ministers receive promotion based on the number and length of Bills that they introduce. I was sorry to hear that because I have no intention of introducing any Bills during this Session. I humbly say to my hon. Friend that the Bill is a short one of only five clauses.

The hon. Members for Leicester, East and for Newbury and my hon. Friend the Member for South Hams and others raised the issue of local or central payments. All hon. Members have received from the Royal Town Planning Institute a briefing that puts the case for local payment, and therefore local control, very clearly and decisively. Interestingly, as the hon. Member for Perry Barr confirmed, Birmingham city council, which raised the legal action, is questioning not that principle but simply the legislative basis for payment.

Mr. Vaz

Will the Minister enlighten the House on the question of interest payments from the date that the money was given back to local authorities during the last year to the date when it might be repayable if the Bill is passed? Who will be responsible for those payments? Will local authorities have to give back the interest for that short period or will they be allowed to keep it?

Mr. Stewart

As my hon. Friend the Under-Secretary of State for the Environment made clear, if local authorities have received interest payments they will be required to pay them back.

Mr. Vaz

I am sorry to press the Minister, but I am referring not to interest received but to interest from the time the payment is made to the local authority to the time that it must repay the money to the Government following enactment of the Bill. I am concerned with that short period.

Mr. Stewart

I am genuinely trying to help the hon. Gentleman. My understanding is that where the interest has been repaid on sums repaid, the amount of that interest will be recoverable by the inspectorate if the Bill becomes law. I hope that that makes the matter clear to the hon. Gentleman. If, on reading Hansard, I find that I have not made the position clear, I shall write to the hon. Gentleman—[Interruption.]—and to the hon. Member for Perry Barr, who is showing an interest.

Mr. Rooker

I refer to my original intervention in the speech of the Under-Secretary of State for the Environment. I understand that some interest has been repaid. Will the Scottish Office Minister now say that the actual cash sum of the original principal plus the interest is the only money to be repaid? In other words, will he say that no one will claim that interest is due on that actual cash sum for the period between the payments?

Mr. Stewart

That is correct. There will be no additional financial burden on a local authority as a result of the Bill.

The hon. Member for Dundee, East asked me a number of detailed questions about the Scottish provisions. In answer to his first question, he was right to say that they relate only to local plans and simplified planning zones or inquiries in Scotland. That is because, in Scotland, examinations in public into structure plan proposals are carried out on behalf of the Secretary of State—who therefore pays the whole cost—and not on behalf of local authorities. The hon. Gentleman was right to say that there have been no inquiries in Scotland in relation to simplified planning zones.

On the hon. Gentleman's third question, the matter has not been tested in the courts in Scotland. He asked what would happen if it were tested before the Bill becomes law. I cannot anticipate the result of any court action, but I can reassure him, I hope, by saying that I do not believe that any local authority is anticipating taking court action—for the obvious reason that the Bill will make the position very clear in the reasonably near future.

The hon. Gentleman asked me about outstanding accounts. In Scotland, the total is £104,000. He asked me about the local authorities involved, which are West Lothian, Kilmarnock and Loudoun, Perth and Kinross and Moray.

I hope that in replying to this short debate I have been able to reassure the House on the perfectly legitimate points that have been raised. I hope that there will not be a bare-knuckle fight in Committee and thereafter on this Bill. Instead, I hope that we can look forward to a constructive discussion of what I believe the House generally has agreed is a necessary Bill. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).