Labour rebel forces Commons vote amid fears of housebuilding reforms ‘wreckage'
But North East Hertfordshire MP Chris Hinchliff forced a division on his amendment 69, which would compel developers to improve the conservation status of environmental features on their land before causing 'damage'.
MPs voted to reject the amendment, with 180 in favour, 307 against, majority 127.
Mr Hinchliff told the Commons that the fund was a 'kernel of a good idea', but added: 'The weight of evidence against how it has been drafted is overwhelming.'
The money will help Natural England set up new environmental delivery plans (EDPs), which Mr Hinchliff said should come with a timeline for their implementation.
He said the proposal will give 'ministers the opportunity to rescue something positive from the wreckage of this legislation, ensuring environmental delivery plans serve their purpose without allowing developers to pay cash to destroy nature'.
He added: 'It would ensure conservation takes place before damage, so endangered species aren't pushed close to extinction before replacement habitats are established, and it outlines that conservation must result in improvements to the specific feature harmed, protecting irreplaceable habitats like chalk streams.'
Mr Hinchliff had also called for a residents' right of appeal against green-lit large developments, if they are not on sites which a council has set aside for building, and new town hall powers to block developers' plans, if they have failed to finish their previous projects.
Mr Pennycook had earlier said the 'status quo' for the environment and development was not working, and instead proposed reforms which he described as a 'win-win' for both.
He said: 'The Nature Restoration Fund will do exactly as its name suggests. It will restore, not harm nature. It is a smart planning reform designed to unlock and accelerate housing and infrastructure delivery while improving the state of nature across the country.'
He later told MPs: 'I feel obliged to tackle a number of the most flagrant misconceptions head on.
'First, some have claimed that driven by a belief that development must come at the expense of the environment, the Government is creating a licence for developers to pay to pollute. A cash-to-trash model, as some have dubbed it. In reality, the nature and restoration fund will do the precise opposite.
'I have been consistently clear that building new homes and critical infrastructure should not, and need not, come at the expense of the environment. It is plainly nonsense to suggest the Nature Restoration Fund would allow developers to simply pay Government and then wantonly harm nature.'
Mr Pennycook said the money would be given to Natural England, which is set to get powers to acquire land compulsorily to put its EDPs into practice.
Labour MP Neil Duncan-Jordan criticised the Government's rhetoric, and argued it was 'too simplistic to argue that this is a debate of builders versus blockers'.
He said 'there's no amount of killing badgers or red tape bonfires which is going to fix' what he described as a 'developer-led model' of planning, when housebuilders 'drip feed developments into the system, prioritising properties which maximise profit and are far from affordable for local people'.
The Conservatives accused the Government of 'greenwashing'.
Conservative shadow housing minister Paul Holmes said: 'While developers may cheer the ability to pay into a Nature Restoration Fund instead of taking direct responsibility for mitigations, we should ask, is this really restoration, or is it greenwashing?'
Matthew Pennycook (Richard Townshend/UK Parliament/PA)
Mr Pennycook said the new laws were needed to 'speed up and streamline' Labour's housing target of 1.5 million homes, clean energy goals and aim to approve at least 150 'major economic infrastructure projects'.
Several MPs had called for swift bricks – hollow bricks where small birds can make their nests – in new builds, in amendments drafted by Labour's Jenny Riddell-Carpenter (Suffolk Coastal) and Barry Gardiner (Brent West), and Liberal Democrat housing spokesman Gideon Amos.
At the despatch box, Mr Pennycook said that 'changing national planning policy is the more effective route to securing swift bricks as a standard feature of the vast majority of new builds', through a regularly updated set of planning rules.
'We are specifically giving consideration to using a new suite of national policies for decision making to require swift bricks to be incorporated into new buildings unless there are compelling reasons which preclude their use, or which would make them ineffective,' the minister said.
'This would significantly strengthen the planning policy expectations already in place, meaning for example that we would expect to see at least one swift brick in all new brick-built houses.'
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