HL Deb 14 December 1993 vol 550 cc1324-7

7.5 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Denton of Wakefield) rose to move, That the draft regulations laid before the House on 25th November be approved [2nd Report from the Joint Committee].

The noble Baroness said: My Lords, I understand that it will be convenient to consider at the same time the equivalent Scottish regulations, which were laid on the same day. I shall speak to both sets of regulations.

The regulations, which have been considered in another place, introduce changes to the parent regulations for England and Wales approved by Parliament in 1989 and for Scotland in 1990. If approved by the House, the amending regulations will come into effect in January 1994.

Since fees were introduced in 1981 they have represented an increasing proportion of local authorities' costs in determining planning applications, which are charged in accordance with the nature and size of the proposed development. Our main proposal is a general increase of 15 per cent. in fees with effect from January 1994, and a further increase of 15 per cent. from January 1995. These increases demonstrate the Government's continuing commitment to meeting their objective, announced in July 1990, that fees should fully cover local authorities' costs in processing and determining planning applications. Taken together, the increases should raise the average recovery rate to more than 80 per cent. nationally.

To propose two successive increases in one amendment is not a new proposition: fees were increased in two stages in 1987. We believe that our present proposals will give local authorities a helpful degree of certainty about their future income from planning application fees. The Government consider that the increases strike the right balance between progress towards full recovery and the likely impact on the construction industry. Fees remain a very small part of developers' overall costs—considerably less than 1 per cent. There is no evidence that they act as a deterrent to development. Very few householders pay any fee at all as most minor domestic development does not require a planning application.

Let me give some indicative figures. The minimum fee for a factory or office development would rise from £120 to £140 in 1994 and to £160 in 1995, while the maximum would rise from £6,000 to £7,000 in 1994 and to £8,000 in 1995. An application to build a new house would attract a fee of £140 in 1994 and £160 in 1995. Substantial alterations to houses would be charged at £70 in 1994 and £80 in 1995. Slightly lower fee levels apply in Scotland, because costs are generally lower.

Both sets of regulations make two minor changes to the fees regime. The first, effective from January 1994, is the extension to advertisements on public seating benches of the flat rate fee, currently £120, which applies to applications for advertisements on parking meters, litter bins and bus shelters within a specified area. Because they are of a similar character it is right that applications for bench advertisements should be charged on the same flat rate basis rather than individually.

The second minor amendment concerns applications for certificates of lawful use. Since July 1992 these have been replacing established use certificates. Where application is made to convert from the old-style certificate, the fee payable is one-half of that for an equivalent planning application. When this concession was introduced last year we indicated that it would be only temporary. We proposed that the full fee be payable from January 1995.

The Government believe that users and potential beneficiaries of the development control system should meet the costs incurred in determining planning applications which would otherwise fall to be met by council tax and business rate payers generally. Even after taking into account the increase in fees proposed in the amending regulations now before your Lordships, planning application fees continue to be modest and a very small proportion of developers' overall costs. We also believe that the other proposed amendments to the fees regime are fully justified. I commend the regulations to the House.

Moved, That the draft regulations laid before the House on 25th November be approved [2nd Report from the Joint Committee].—(Baroness Denton of Wakefield.)

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Baroness for introducing these two measures, but they are not welcome. She must know that on average 85 per cent. of local government finance is provided by central government. She must also know that the extra 15 per cent. comes from council tax which, if standard spending assessments are exceeded, can be capped. Therefore, local government finance is severely constrained by central government. If the noble Baroness is arguing, as she appears to be, that planning services should in some way have their costs met, then she is going against the whole grain of local authority finance.

Furthermore, the Minister said that we are now talking about a 15 per cent. increase. I notice that the noble Lord, Lord Strathclyde, is here. He knows the arguments very well. There is a 15 per cent. increase now and another 15 per cent. increase in. January 1995. I understand from government figures the rate of inflation to be somewhere below 2 per cent. So why are the Government now saying that 15 per cent. must be added on these fees and a further 15 per cent. projected on an unknown inflation rate and an unknown cost rate in January 1995?

In practice this is a tax. I hope that the noble Baroness will come out honestly and say so. It is another tax which will fall on those who are less advantaged. Businesses can pay the extra costs. But the erection of dwelling houses and buildings referred to in Schedule 1, are all within the context of the lives of ordinary people who will have to pay. So this is yet another tax the Government are trying to impose on people, sliding it under a cost recovery programme. That simply will not work.

When the noble Baroness replies, I ask her to reflect for a moment that this is another way of inhibiting people from participating properly in the planning process. It is another way of saying, "We do not want to raise income tax. We are going to charge 15 per cent. on this and another 15 per cent. on that regardless of the cost." Is not the noble Baroness ashamed of the regulations? Would she like to withdraw them?

Lord Mackie of Benshie

My Lords. I support the noble Lord, Lord Williams of Elvel, in objecting to any rise in costs, particularly when they are well above the rate of inflation. In fact the costs have been reasonable when one considers the work involved for local government. I object to the rises, but I cannot say that I object to the principle of charging. We have a spate of planning applications and they have to be taken seriously.

I wish to know the difference between an application and a deemed application. Is a deemed application a doomed application or is it one which may become an application in certain circumstances? It is a curious piece of phraseology. I am sure that the House would like to hear an explanation.

Baroness Denton of Wakefield

My Lords, the noble Lord, Lord Williams, will not be surprised to know that it is not my intention to withdraw the regulations. The power to set fees for planning applications was prescribed in legislation in 1980. Today we are concerned with whether the proposed increases of 15 per cent. over the current national fees scales are reasonable in all the circumstances. The Government firmly believe that they are.

Lord Williams of Elvel

My Lords, can the noble Baroness say whether the legislation enables the Government to set fees, not for the coming year, but thereafter in 1995, and on what basis they are set?

Baroness Denton of Wakefield

My Lords, I said that to propose two successive increases in one amendment is not a new proposition. It was done in 1987. It gives local authorities the benefit of some, certainty in their plans. As the noble Lord may recall, that was welcomed by other members of the Opposition Front Bench.

The noble Lord relates the issue to inflation. Of course it is good news that it is below 2 per cent. The difference that makes to the 15 per cent. is largely because of our control of inflation.

Lord Williams of Elvel

My Lords, I do not want to keep on interrupting the noble Baroness. Can she explain what she has just said? She referred to the difference between under 2 per cent. inflation and the 15 per cent. that she is now advocating that the House should approve of the charges, saying that that is due to the Government's successful control of inflation. Can she enlarge on that?

Baroness Denton of Wakefield

My Lords, I shall go over the ground again. I was trying to explain that the issue we are discussing is cost recovery. It is a policy we announced it was our intention to work towards in 1990. We have proceeded gradually for the benefit of the parties involved. The noble Lord related it to inflation. I was simply pointing out that the differential was such that it gave him anxiety because of our control of inflation. I am sure that the noble Lord will be able to read Hansard tomorrow.

Lord Williams of Elvel

My Lords, I shall read it, but I cannot understand what the noble Baroness is saying.

Baroness Denton of Wakefield

My Lords, the question is this: who should pay for planning applications? We believe that those people who take benefit from them should pay, not other taxpayers and business rate payers. That is the reason behind the provision. Cost recovery depends on two factors. We have commissioned research into the somewhat large variation in costs between local authorities. That is under review at the moment. I appreciate that there are anxieties. We are working towards a target which we announced some years ago of a 100 per cent. recovery.

I say to the noble Lord, Lord Mackie, that a deemed application reflects a retrospective application and not, as he suggested, a doomed application. I hope that that is of benefit. I am pleased to tell the noble Lord, Lord Williams, that the Government are always ready to receive suggestions for improvement to the fees regime. I hope that sensible ideas to improve the system will continue to come from all those who have an interest in planning.

On Question, Motion agreed to.