1 Lord Andrew Adonis speech at Second Reading of Growth & Infrastructure Bill 8 January 2013

My lords, I thank the Minister for explaining the Bill. I look forward to working with her as we scrutinise it in detail, and I am fortunate to be supported by my noble friends Lord McKenzie of Luton and Lord Tunnicliffe.

The Bill does a few worthwhile things, including removing restrictions on the disposal of land for less than best consideration, and on allowing the stopping up or diverting highways and public paths to run alongside the planning process.

However, the meat of the Bill is less appetising. Its unifying theme is not growth but weakening local government which contradicts not only the coalitions previous policy of localism but also Lord Heseltines excellent report on growth, which condemns what he calls the drift to centralism as an impediment to local economic regeneration.

This is what Lord Heseltine says in his report, published to acclaim on all sides of the House only two months ago. I quote:

As Whitehall has taken more powers so its distrust of local decision makers has increased. At the first sign of trouble, further powers are wrested back to the centre. At the same time and I would say as a result the involvement of local business people in the governance of their communities has dwindled and their energy and innovation has been lost.

Yet what does this Bill do? Precisely what Lord Heseltine criticises: on the unsubstantiated claim that local authorities arent giving enough planning consents quickly enough, it wrests power back to centre, authorising ministers to suspend local planning authorities entirely for the first time since the modern planning system was established after the Second World War.

2 It does this in the very first clause of the Bill, whose opening words are these: A relevant [planning] application that would otherwise have been made to the local planning authority may, if the applicant so chooses, be made instead to the Secretary of State ...

My lords, this is the antithesis of localism and Lord Heseltines report.

The suspension of local democracy is supposed only to be in cases of failure, but no surprise the government are finding it hard to define failure. When attempting to give the House of Commons a concrete example of a failing local planning authority, the Secretary of State Eric Pickles said Hackney. He then had to correct this to Haringey, and apologised unreservedly to Hackney.

No doubt the confusion was caused by Hackney and Haringey both beginning with the letters HA and ending in EY. I hear that Mansfield and Macclesfield, not to mention Hertfordshire and Herefordshire, are eyeing each other warily and sending maps to CLG with their locations, spelling, and other vital statistics clearly distinguished.

The criteria for failure are not set out in the Bill but are at ministerial discretion and are being consulted upon separately. When she replies, could the noble Baroness tell us how many local planning authorities would be liable for suspension under the latest draft of the criteria, as they keep changing, and which ones they are?

I note that in respect of the speed of deciding major planning applications, which is one of the new criteria, the three slowest local authorities in the country are Kensington and Chelsea, Torbay and North Norfolk. I particularly look forward to the noble Baronesss views on the competence of Kensington and Chelsea. But as for the national picture, in 2011/12 councils approved 87% of applications a ten year high with 82% decided within eight weeks and 93% within 13 weeks. This is not a plausible case of failure, and developers can already appeal to the Planning Inspectorate on

3 grounds of non-determination in the required time under section 78(2) of the Town and Country Planning Act 1990.

To be fair, I suspect that in her heart of hearts as a distinguished former local authority leader the noble Baroness doesnt want the power to suspend local planning authorities, but she has been told by the Chancellor that an example has got to made, in Admiral Byng fashion, of some supposedly obstructive councils, so she has got to find a few to shoot at dawn whether she likes it or not.

My lords, localism and local government have strong supporters in all parts of the House, and I hope we can work constructively to get a better balance between local democracy and Whitehall control.

The same applies in respect of other anti-local provisions of the Bill. There is concern at the restrictions on the designation of village greens and town greens in Clauses 13 and 14. My right hon. friend Hilary Benn describes this as positively Kafkaesque in that under the Bill the moment a planning application is published, citizens are banned from seeking to register a green. As he puts it, since the first that most people will hear of an application is when it is published, this seems to be a pretty clever way of stopping people exercising their rights, unless they happen to be mind readers.

There are also the wide powers to take planning applications away from local communities in Clause 24, which significantly extends the lists set out in the Planning Act 2008 by including business and commercial projects. There is Clause 8 which overrides the requirement to preserve the beauty of national parks in the siting of masts and overhead cables, which appears entirely unrelated to the imperative to extend broadband which the national parks strongly support.

There is a good deal of concern about Clause 6, which sets aside affordable housing requirements through the Section 106 process. This appears to be another case of Treasury knee-jerkism. It is obviously vital that housing developments in areas of need are economically viable; but no case has

4 been made that s106 is holding things back, whereas without s106 there is a real danger that fewer mixed communities will be created and there will be less affordable housing.

Asked about s106, the National Housing Federation said and I quote: No evidence has been provided to suggest that planning obligations are routinely stalling development.

The Council of Mortgage Lenders said and I quote: We are not convinced that section 106 obligations are necessarily the key sticking point.

When the Planning Minister was asked by the Commons select committee, he could give no statistics on the number of developments being held up by s106 difficulties. He suggested that there were some 1,200 sites and 75,000 homes stalled, based on something called the Glenigan database. But when asked to publish the database, the minister said he couldnt because it was commercially sensitive, and when asked the straight question: how many were stalled because of s106 requirements, he said and I quote: It is very difficult to say.

Perhaps the noble Baroness could say when she replies? If she cant say, then surely Parliament should not be giving her the power to override local democracy on cause unseen. This is not a minor matter. Thousands of affordable homes are provided each year under s106 agreements. I should add that an estimated 400,000 homes have planning permission but are yet to be built, which points to much wider economic factors at play than the planning system.

So much for planning and local democracy. The other critical concern about the Bill is Clause 27. This is the rights for shares scheme.

The House will recall the origin of this idea: Adrian Beecrofts controversial plan to abolish employment rights in respect of unfair dismissal, even as the period of qualification for such rights was being doubled from one year to two years.

5 The Business Secretary Vince Cable vetoed the Beecroft plan, saying, Britain has already got a very flexible, cooperative labour force. We don't need to scare the wits out of workers with threats to dismiss them. It's completely the wrong approach."

We on these benches and I suspect most of our friends on the Lib Dem benches agree entirely.

The trouble is, Vince changed his mind, or had it changed for him. At the instigation of the Chancellor, the Beecroft proposal reappeared tied to the allocation of shares and is now Clause 27 before us. Clause 27 is Beecroft by the back door: it creates so-called employee shareholders who have been given shares worth at least 2,000 and up to 50,000 on the day of issue, who will have no rights to statutory redundancy pay, or to request flexible working, to request time off to train, or to claim unfair dismissal.

It is important to separate the issues of employment rights and wider share ownership. We strongly support wider share ownership among employees, and support many of the detailed and well considered proposals to this effect in the Nuttall report, published only six months ago.

However, that is entirely different to trading shares for basic rights in what is generally an unequal relationship, which is the very reason why employment rights exist in the first place and why they have been built up by governments of all parties over more than a century.

My lords, there is nothing well-considered about this shares for rights plan. On the contrary, it makes the back-of-the-envelope look like Magna Carta. The proposal was announced on October 8th. A consultation started twelve days later on October 18th. It was completed on November 9th all of which was happening while the House of Commons was approving the very plans supposedly being consulted upon. The consultation demonstrated almost universal criticism and lack of support, yet the government proceeded anyway and a mere two months later, your Lordships are now all that stand between the back of the envelope and the law of the land..

6 A host of critical issues about shares-for-rights were not addressed properly in the Commons and need to be considered by your Lordships. First, what protection will there be against people being forced to take no-rights jobs? In the Commons the government agreed to statutory protection in respect of existing employees, but what about new employees? In particular, what about those on benefits, who stand to have their benefits withdrawn if they do not take no-rights jobs?

Michael Fallon only exacerbated these concerns in the Commons. He refused to accept a Lib Dem amendment to give protection to benefit claimants from having to take no-rights jobs. On the contrary he said and I quote: The Government believe that jobseekers allowance claimants must actively seek and be available for work...it is right that employee shareholder jobs should be as much a part of that consideration as any other.

He said that in such cases they should normally accept the offer let me stress that, my Lords: in the view of the government, job seekers should normally accept jobs with no rights when offered and the only concession he made was that if some of the withdrawn rights were, and I quote, appropriate ... for example the right to request flexible working could well be crucial for a parent with young children then that could be taken into account in deciding whether their benefits should be docked. He went on to say that the DWPs decision-makers guidance would be amended accordingly. Can I ask the noble Baroness, when she replies, whether she will circulate the new DWP guidance before we consider this matter in Committee?

So my lords, far from meeting concerns about compulsion, the government is parading compulsion as positively desirable. As Paul Callaghan, a partner in the respected legal firm Taylor Wessing puts it: these [shares-for-rights] contracts will be optional to the extent that eating and drinking is optional.

Secondly, my lords, in respect of employees facing redundancy or dismissal, there is the obvious point that without existing rights, those who are aggrieved will be encouraged to migrate to claims

7 of discrimination which are generally far more onerous and time-consuming when they come to tribunals. This isnt just because discrimination claims will be the only avenue open to the

aggrieved: to make another obvious point, it will often be true, since it is purely rational that an employer would seek to dismiss or make redundant first those who have no rights to compensation, ie discriminate against them unfairly.

Thirdly, what about tax avoidance? These rights-for-shares contracts will go up to 50k worth of shares, and the government says they will get favourable tax treatment although it still hasnt given the details and it expects us to pass Clause 27 into law without knowing what the precise tax treatment of these shares will be, unless the noble Baroness can enlighten us when she replies.

The Institute for Fiscal Studies describes Clause 27 as a billion pound lollipop to tax avoiders, which looks like it will foster a whole new avoidance industry, just as government ministers are falling over themselves to condemn such ... behaviour. When she replies could the noble Baroness give me her estimate of the likely cost in lost tax revenue of these new employee-shares?

My lords, let me add this. In my entire time in government and in the House, I have never seen such unanimous opposition to a proposal from those it is intended to benefit namely companies themselves. Justin King, the chief executive of Sainsburys who was on the Prime Ministers business advisory group, says that the policy is not what we should be doing. He went on:

What do you think the population at large will think of businesses that want to trade employment rights for money? Our agenda .... should be making employing people easier and less costly.

Only five of 219 consultation responses welcomed the proposal. The Law Society says it will likely create more red tape not less, it raises substantial risks of costly litigation, and it creates serious potential of claims of discrimination. It isnt even welcomed by the Employee Ownership Association, which says of Clause 27:

8 There is no need to dilute the rights of workers in order to grow employee ownership.

So my lords, we have our work cut out on this Bill. Local democracy, affordable housing, the rights of employees at work these are not small matters, they go to the heart of our society and our economy. Moreover, none of them are impediments to growth. To get growth, we need vibrant local leadership, we need more affordable housing, we need self-confident not fearful companies and employees. Alas, this Bill weakens all three.

ENDS