My Lords, we have discussed this extensively at all stages of the Bill and I hear the arguments that have been made again today. Since Report, I have also had the opportunity of discussing this with representatives of the National Housing Federation and that has been helpful.
I am pleased and always have been that the principle of a sunset clause to repeal the clause in April 2016 is generally supported. However, these amendments focus on the power given to the Secretary of State to extend the provision by order beyond 2016. The noble Lord, Lord McKenzie, has referred to the date of April 2016 in the Office for Budget Responsibility’s market forecasts as a sensible and justified sunset date. We do not know whether things will have improved by then and I am sure that the noble Lord does not either. One can only hope that they will have. If they have not, we would want to retain an option to extend the measure if market uncertainty remains. We have hoped that we would dig ourselves out of the economic crisis over the past couple of years but it has not been possible. One cannot say with total confidence that 2016 will see us out of the doldrums but we expect and hope that it will.
The issue at stake is not the sunset clause, which has already been agreed, but how any future extension should be constrained. I sympathise with the wish for certainty and I hope it is reasonable to expect that there will be economic stability by 2018, and that consequently there will be little need for extension of the provision. However, while I agree that 2018, as proposed by my noble friend, seems a reasonable limit for this clause, it is as arbitrary a date as any and would limit future flexibility.
To retain flexibility is prudent. With flexibility by order the matter could be taken forward. If it had to be, the Government would have to come to both Houses, because it would be an affirmative order. My noble friend asked what evidence they would have to
bring: I suggest that it would have to be the best evidence that they could find, which would presumably at least refer to the amount of affordable housing that still needed negotiation. Both Houses would have to consider this in the light of any evidence that the Government had at that stage.
I am also wary of having a fixed date of 2018, or a fixed extension period, because the clause introduces a new application and appeal process. Viability alone and not policy requirements or scheme merits is the subject of the application and appeal. The on-the-ground impact will not be known until the clause has been in operation for a little while and we have seen how the viability process works. It is essential, therefore, that we maintain flexibility to understand the impact of the measure over a little time. Along with more certainty in market conditions, this would give better ground for assessing the merits of any extension during 2015 when consideration would have to begin as to whether the extension to 2016 should be made.
The clause is drafted so that the order must insert “a later date”. It does not allow for a permanent provision. This wording reflects our intention that this clause will operate only for as long as it is required. Its intent is to be temporary. A permanent provision would require new primary legislation. Finally, it could be argued that the real future of this clause is in the hands of local authorities. If local planning authorities take account of their local economic realities and negotiate viable and flexible agreements with developers, there will be little scope for challenge.
Since we debated these provisions on Report, I have arranged a meeting for interested Peers—those who have spoken—on the draft viability guidance that will accompany this clause. I am grateful that the noble Lords, Lord Tope, Lord Shipley and Lord Best, responded to that invitation and were able to give us some thoughts on the matter. It was perhaps a little unfortunate that we did not have a bigger turnout but I am sure that everybody was busy.