HANSARDCommons12 Nov 202539 contributions

Draft Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2025

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The Committee consisted of the following Members:
Chair: Dr Andrew Murrison
† Amos, Gideon (Taunton and Wellington) (LD)
† Bacon, Gareth (Orpington) (Con)
† Cocking, Lewis (Broxbourne) (Con)
† Costigan, Deirdre (Ealing Southall) (Lab)
† Evans, Chris (Caerphilly) (Lab/Co-op)
Farron, Tim (Westmorland and Lonsdale) (LD)
† Fortune, Peter (Bromley and Biggin Hill) (Con)
† German, Gill (Clwyd North) (Lab)
† Hatton, Lloyd (South Dorset) (Lab)
† McKinnell, Catherine (Newcastle upon Tyne North) (Lab)
† Niblett, Samantha (South Derbyshire) (Lab)
† Opher, Dr Simon (Stroud) (Lab)
† Pennycook, Matthew (Minister for Housing and Planning)
† Simmonds, David (Ruislip, Northwood and Pinner) (Con)
† Uppal, Harpreet (Huddersfield) (Lab)
† Webb, Chris (Blackpool South) (Lab)
Whittome, Nadia (Nottingham East) (Lab)
Jack Edwards, Committee Clerk
† attended the Committee
Third Delegated Legislation Committee
Wednesday 12 November 2025
[Dr Andrew Murrison in the Chair]
Draft Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2025
The Minister for Housing and Planning (Matthew Pennycook)
LabourGreenwich and Woolwich
I beg to move,
That the Committee has considered the draft Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2025.
It is a pleasure to serve with you in the Chair, Dr Murrison—for the first time, I believe. The regulations were laid before the House on 15 October.
The Government have identified data centres, the buildings that store much of the data generated in the UK, as essential infrastructure that is necessary to support, grow and develop the UK economy and that is integral to delivering the UK industrial strategy. As hon. Members know, data infrastructure now underpins almost all economic activity and innovation, including the development of AI and other technology. It is increasingly critical for public service delivery and how citizens interact with one another and the state. For those reasons the Government formally designated data centres as a sub-sector of communications in the list of critical national infrastructure in September 2024—a recognition that their loss or compromise could severely impact the delivery of essential services or have a significant impact on national security, national defence or the functioning of the state, as is the case with other CNIs: energy, water, transport and other sectors.
The Government are committed to ensuring that the planning system effectively facilitates development to meet the needs of a modern economy, including supporting essential digital infrastructure such as data centres. In July last year we consulted on how the national planning policy framework could better support economic growth in key sectors, given their importance to our economic future. In response to feedback from a wide range of stakeholders we announced plans alongside the publication of that revised NPPF in December last year to enable certain large-scale projects within knowledge, creative, high technology and data driven industries to be directed into the nationally significant infrastructure projects consenting regime process. These regulations deliver on that announcement by prescribing data centres as a type of business or commercial project that may be directed into the NSIP consenting regime. In effect, they add data centres to the existing nine prescribed projects set out in the schedule to the Infrastructure Planning (Business or Commercial Projects) Regulations 2013.
Gareth Bacon (Orpington) (Con)
ConservativeOrpington
It is always a pleasure to serve with you in the Chair, Dr Murrison, and to sit next to my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds). I also welcome the opportunity to sit opposite the Minister, and I appreciate the remarks he has made in this Committee. I welcome the opportunity to address this statutory instrument on behalf of His Majesty’s Opposition.
As the Minister has said, the UK is home to Europe’s largest data centre market, and the Opposition welcome the aims of the regulations in so far as they wish to enable the market to continue to grow—and to do so with greater ease. It is fair to say that the Government and the Opposition have not always seen eye to eye on aspects of the Government’s planning reforms. The Opposition would not being doing our jobs correctly if we did not draw attention to some of the brazen power grabs made by the Ministry of Housing, Communities and Local Government—and specifically by the Minister’s former boss—in the name of devolution, reorganisation and planning reform.
When it comes to data centres, however, we are clear that it is the right approach to work towards a less complex system to help see them built. That is not to say that the regulations are perfect. Having looked over the Secondary Legislation Scrutiny Committee’s report, it is regrettable to note that the Government have brought the regulations without the accompanying draft national policy statement, which, in the Government’s own words,
“will set out the framework for decision making in relation to data centres.”
As the Committee pointed out, it makes it much more difficult for this House to consider and fully understand how the applications will be assessed without having seen that first.
Secondly, as the Committee noted, the Government are removing the current statutory consultation requirements at the pre-application stage of the nationally significant infrastructure policy process and substituting them for non-statutory pre-application engagement with local communities. As we have seen throughout the debates regarding the Planning and Infrastructure Bill, it is not just the Opposition that are concerned about proper consultation with local communities. As the Committee suggested, it would be prudent to seek further assurance from the Minister that meaningful opportunities will still exist for local communities to make representations on proposed developments. I seek that assurance from the Minister today.
Gideon Amos (Taunton and Wellington) (LD)
Liberal DemocratTaunton and Wellington
It is a pleasure to serve with you in the Chair, Dr Murrison. The Liberal Democrats broadly support the statutory instrument, but we have a number of issues to raise. One is that this measure should not mean the overriding of all planning policy. Indeed, green belt policy needs to be protected. Although we welcome the fact that an NPS is being developed, it would have been more helpful to see the draft of it at this stage. We encourage the Government to go further and consider a national policy statement for business and commercial projects generally, because they will have a big impact as nationally significant infrastructure projects.
There are significant opportunities with big business and commercial developments of data centres. Such developments enable the meeting of standards that cannot be met with smaller piecemeal development. With an eye to what we all must do—seek ways to drive down bills for householders—it is worth noting that there are 1.4 GW of data centres in the UK; that means 1.4 GW of heat. That heat is often the subject of agreements in which companies are paid to take it away, but it is free heat that could heat over 1 million households. We hope there will be a clear requirement in the national policy statement to ensure, as happens in other countries, that “waste” heat—which is free or has a negative cost, because sometimes a company will pay to have the heat removed from its site—is used in local networks wherever possible. We strongly encourage the Government to go down that route.
We also want the strategic spatial energy plan introduced so that there is a national overview of where data centres are located, with the proviso that under this statutory instrument the Secretary of State will consider, on a case by case basis, whether or not to direct under section 35 that a data centre is a nationally significant infrastructure project. We are content to support this measure, but we urge the Government to move forward with their national policy statement to ensure the provision of free heat from data centres to households and to defend key planning policies that must remain in place, such as protection of the green belt.
Matthew Pennycook
LabourGreenwich and Woolwich
I thank the shadow Minister and the Liberal Democrat spokesman for that series of points and questions, to which I will do my best to respond—I note that some of them stray outside of my departmental responsibilities. We are talking specifically about putting in place necessary changes to the planning regime to allow formal requests to be made for data centres to be considered under section 35. Other things, such as the spatial plans that the Liberal Democrat spokesman just mentioned, are matters for the Department for Energy Security and Net Zero, and the NPS is obviously a matter for Department for Science, Innovation and Technology. However, I will make sure that the relevant Ministers are made aware of the comments of the hon. Members.
I will start by responding to the points made about the draft NPS. That NPS is still in development and testing. Given the time that it may take to comply with the statutory requirements for designation of a new national policy statement, it was considered appropriate in this instance to lay the draft SI in advance. As I made clear, we intend to publish the NPS in draft form near the time at which this SI will come into force. The laying of the SI last month gives an indication to the sector—and the Government think that this is important—and to prospective data centre applicants at a very early stage in their development, who may be interested in using this route, that we are moving forward on delivering against the commitment we made last December. It also recognises the importance that we give to the delivery of data infrastructure more generally.
DSIT aims to publish the draft NPS after these amending regulations come into force, so it is possible that it will be published before any requests for a data centre to be directed into the NSIP consenting regime either come forward or need to be decided. That would mean that the draft NPS would be considered as an important and relevant matter in the decision-making process for any data centre project that is subsequently directed to proceed through the NSIP regime.
Lewis Cocking (Broxbourne) (Con)
ConservativeBroxbourne
I should declare that I have a data centre in my constituency under construction. It went through the normal planning route. Will the Minister confirm to the Committee that if someone wants a data centre to go through the nationally significant infrastructure project regime, the local planning authority and local people will still be able to have a say on the application?
Matthew Pennycook
LabourGreenwich and Woolwich
That is a fair question and the hon. Gentleman pre-empts the next point that I was going to make, specifically about local accountability. This is important. The NSIP consenting process provides substantial opportunity for interested parties, including local communities and local authorities, to have their say on proposals going through that process.
Under the Planning Act 2008, local authorities are invited to submit a local impact report giving details of the likely impact of the proposed development on their area, which the Secretary of State must have regard to when deciding the application. The examination process, which all NSIP applicants need to go through, provides the opportunity for local communities, interested parties and statutory bodies to make representations and for them to be considered by the examining authority in examination of the application and in the subsequent report that will be made to the Secretary of State for a decision on whether to grant development consent.
Peter Fortune (Bromley and Biggin Hill) (Con)
ConservativeBromley and Biggin Hill
This is a little parochial to London, but can we ensure that local authorities in London are consulted, along with the Mayor of London, so that their power to decide is not usurped by the mayor?
Matthew Pennycook
LabourGreenwich and Woolwich
As I said, the NSIP regime provides for local communities, local authorities, other statutory consultees and stakeholders to input into that process. In a similar way to how a local planning authority undertakes a period of consultation to enable views on a planning application to be expressed, the examination process under the NSIP regime—which all NSIP applications must go through—provides the opportunity for local communities and interested parties to make representations to be taken into account by the examining authority in examination of the application and by the Secretary of State when they come to decide whether to grant development consent.
In the time I have, I should respond to a couple of other issues that were raised. Power usage was a point made by the hon. Members for Orpington and for Taunton and Wellington. Energy and carbon footprint are a key issue for data centres. The sector operates under a climate change agreement to encourage greater uptake of energy efficiency measures among operators. The UK has committed to decarbonising the electricity system by 2030, subject to security of supply, and data centres will increasingly be powered by renewable energy resources.
Newer, purpose-built and modern data centres can provide compute at a higher efficiency than older, converted data centres, in terms of the amount of power they draw on, but data centres will play a major part in powering the high-tech solutions to environmental challenges, whether that is new technology that increases the energy efficiency of energy use across our towns and cities, or development and application of innovative new tech that takes carbon out of the atmosphere. We are, however, very conscious that data centres draw on quite a significant amount of firm power, and the Government will take that into account in making decisions as to whether individual applications go through.
Lastly, I should address heat, which the hon. Member for Taunton and Wellington rightly mentioned. He is absolutely right to say that data centres produce a significant amount of heat. The technology exists to capture that heat and to use it in district heating networks, or to meet significant demand. There is potential, therefore, for the heat to be captured and used to further benefit than happens currently, but there have already been successful examples—which are worth highlighting—of using data centre heat for hospitals, homes and other uses. One such example is the use of a data centre to heat a local swimming pool in Devon. We will take that into account, as I am sure DSIT did in the drafting of its national policy statement and in its conversations with other Departments. However, I will ensure that the hon. Gentleman’s comments are brought to the attention of the relevant Minister.
Gideon Amos
Liberal DemocratTaunton and Wellington
I intervene simply to place on the record my entry in the Register of Members’ Financial Interests. I recently undertook a study trip to Denmark to look at waste heat. I probably should have put that on the record, but it is in the register.
Matthew Pennycook
LabourGreenwich and Woolwich
I hope the point is well made that, as part of the NPS process and more widely, we are engaging with developers and operators to determine whether the Government should be making further interventions that are necessary and proportionate to encourage the take-up of such solutions.
Samantha Niblett (South Derbyshire) (Lab)
LabourSouth Derbyshire
In the States, a lot of data centres have had pushback from local communities, which are seeing an increase in their energy bills. We cannot quite work out why. Will the Minister commit to work with me, DESNZ and possibly DSIT to ensure that when data centres are built as national infrastructure—because of this change in legislation—that will not mean that consumers end up paying higher prices for whatever reason? I welcome the focus on using waste heat to benefit local communities, but I feel somewhat anxious about that increase in consumer bills because of the building of data centres.
Matthew Pennycook
LabourGreenwich and Woolwich
I thank my hon. Friend for her question, but she tempts me to stray way outside my departmental responsibilities. Instead, I commit to ensure that the relevant Minister from DESNZ is notified about her concerns and that we all reflect, as a Government, on the point made.
In conclusion, notwithstanding the range of considerations about data centres that we have discussed, I wish to draw the Committee back to what the draft regulations seek to achieve. They are merely an enabler for data centres that might be considered of national significance to be capable—only at the request of developers of such projects—of being directed to an alternative mechanism for obtaining development consent. Applications for data centres directed to the NSIP consenting route will undergo a thorough and robust process. As I said, that will include examination by an independent examining authority where local communities and others can participate and register their views before the Secretary of State decides whether to grant consent. I hope that the Committee will agree that it has considered these amending regulations and will be supportive of them.
Question put and agreed to.
Committee rose.