Thursday 20th July 2023
(1 year, 5 months ago)
Lords ChamberLevelling-up and Regeneration Act 2023 View all Levelling-up and Regeneration Act 2023 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 142-IV(a) Amendments for Report (Supplementary to the Fourth Marshalled List) - (20 Jul 2023)
Baroness Scott of Bybrook
Member's explanatory statement
This amendment is consequential on the amendment in the Minister’s name at page 195, line 35.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, we have reflected on the debate in Committee and the report from the Delegated Powers and Regulatory Reform Committee, and I reiterate my thanks to the committee for its work in relation to this Bill. We want to ensure that the designation of locally led development corporations by local authorities is appropriately scrutinised, and therefore these amendments, in line with the DPRRC’s recommendation, apply the affirmative procedure to the orders establishing locally led urban and new town development corporations. I beg to move.
Lord Stunell (LD)
My Lords, I welcome the government amendments which, as the Minister has said, bring decisions made by the Secretary of State on urban development areas back to Parliament in the form of affirmative resolutions rather than negative resolutions. In my view, which I have expressed frequently, far too much in this enormous Bill is set out in the form of decisions left entirely to the Secretary of State to fill in by way of statutory instruments. Far too often, the only restraint is the wholly inadequate procedure of negative resolutions. I am pleased that the Minister has recognised the overreach in the original drafting and has brought forward amendments to correct that.
In Committee, I expressed general support for the proposition of locally led development corporations, and that was helped on by the Minister’s reassuring words to the effect that the wide discretion given to the Secretary of State in Clause 162 to designate a development corporation is, in practice, entirely conditional on there first being a positive initiative from that locality. That is all the more important in view of the strange reluctance to include town and parish councils in the formal consultation process.
In responding to this debate, I would be very grateful if the Minister could make assurance doubly sure on that point of local initiation and leadership of the new generation of development corporations. I look forward to hearing her reassurance on that point.
Baroness Taylor of Stevenage (Lab)
My Lords, those who have heard me speak in this Chamber will know that I am a great fan of development corporations, having grown up in a town that, apart from our historic old town, was created and, for the most part, built by Stevenage Development Corporation. At that time, the innovation of development corporations took a great deal of debate in Parliament to initiate, and we have hopefully moved on a bit towards devolution since the middle of the last century.
If there is to be parliamentary scrutiny of the establishment of development corporations, it is absolutely right that it should be done by the affirmative procedure, so we welcome the movement on that in Amendments 146 and 147, to ensure that the establishment of locally led urban and new town development corporations is drawn to the attention of both Houses, in the same way as those that are not locally led.
We hope that it will be the intention of government to scrutinise only the technical aspects of governance, for example, as it would be entirely against the principles of devolution that the Bill sets out to promote for any Government to effectively have a veto on whether proposals for a development corporation go ahead. During the passage of the Bill, we have talked about a new relationship of mutual trust between local and central government, and we hope that such parliamentary scrutiny will not be used to undermine that.
I absolutely agree with the noble Lord, Lord Lansley, about the importance of determining the nature of parliamentary involvement in different types of development corporation. Of course, we would have concern about Parliament intending to have a veto on the locally led ones. The other amendments in this group are consequential on the Minister’s previous amendment on page 195. We look forward to her comments about the points raised.
Baroness Scott of Bybrook (Con)
My Lords, I assure the noble Lord, Lord Stunell, that, yes, locally led development corporations will come from local authorities—they will put them forward.
My noble friend Lord Lansley brought up the different forms of development corporations. Rather than standing here and taking time, I would prefer to write to him and copy everybody in. I suggest that we might have a small group meeting about this when we come back in September so that any questions can be asked. I thank the noble Baroness, Lady Taylor of Stevenage, for her support for these amendments.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment is the first of a number that remove provision applying negative procedure to orders establishing locally-led urban and new town development corporations, and instead bring those orders within the existing procedures for such corporations that are not locally-led. The result is that affirmative procedure will apply (without hybrid procedure).
Baroness Scott of Bybrook
Member’s explanatory statement
See the explanatory statement for the amendment in the Minister’s name at page 195, line 35.
Baroness Scott of Bybrook
“(5A) In subsection (4), after “(1)” insert “or (1B)”.(5B) In subsection (4A), after “(1)” insert “or (1B)”.”Member’s explanatory statement
See the explanatory statement for the amendment in the Minister’s name at page 195, line 35.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment removes a power that is no longer needed in the light of the conclusion of proceedings in Senedd Cymru on the Historic Environment (Wales) Bill.
Baroness Scott of Bybrook (Con)
My Lords, government Amendment 152 relates to a consequential amendment on compulsory purchase. In light of the successful passage of the Historic Environment (Wales) Act through the Senedd Cymru, there is no longer a requirement to include a regulation-making power and associated provision under paragraphs 7(2) and (3) of Schedule 16. As such, these provisions are not required and should not form part of the Bill.
Government Amendment 153 seeks to add Part 7 of the Housing and Planning Act 2016 and Section 9 of the Tribunals and Inquiries Act 1992 to the definition of “Relevant compulsory purchase legislation” under Clause 177(6). The amendment is required because both Acts, or regulations relating to compulsory purchase made under them, make provision requiring the preparation of compulsory purchase documentation to which approved data standards published under Clause 177(3) should be applicable. I hope that the House will support government Amendments 152 and 153.
Baroness Taylor of Stevenage (Lab)
My Lords, this group brings up to date the provisions in the Bill so that they are appropriately applied to Wales. It also updates the list of types of compulsory purchase that can be made, subject to common data standards—we accept that this is important. We have had much discussion about the issues of hope value during the passage of the Bill, and it is therefore absolutely right that the Minister responded to Senedd Cymru’s request to make that apply in Wales as well.
I associate this side of the House with the comments by the noble Baroness, Lady Pinnock. It would be helpful if these types of provisions could be consulted on with the Welsh, Scottish and Northern Irish Administrations before they come before this House. But I am grateful to the Minister for listening to the Welsh Senedd’s request, and we are pleased to see these amendments coming forward today.
Baroness Scott of Bybrook (Con)
I thank the noble Baronesses for their input. I say to the noble Baroness, Lady Pinnock, that we understand the devolved authorities’ rights and responsibilities, but, as always, there is negotiation on any legislation that we put through which may affect them. The Government and the Welsh Government did not reach a settled position on the CPO powers until after the Lords Committee stage had concluded. As these things are complex, our devolved authorities also need time to discuss and make decisions. I can assure the noble Baroness that we are working closely with them all the time.
Baroness Scott of Bybrook
“(fa) section 9 of the Tribunals and Inquiries Act 1992,(fb) Part 7 of the Housing and Planning Act 2016, or”Member's explanatory statement
This amendment adds further legislation to the list governing the types of compulsory purchase documentation which can be made subject to common data standards.
Baroness Scott of Bybrook
(a) in the case of a building in England, is to be used as—(i) social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008, or(ii) housing of any other description that is prescribed, or(b) in the case of a building in Wales, is to be used as housing of a description that is prescribed.”;”Member's explanatory statement
This amendment and the amendments in the Minister’s name at page 234, line 23 and page 235, line 43 adjust the definition of affordable housing used in Clause 180 so that an existing definition relevant only to England is not made to apply in Wales.
Baroness Scott of Bybrook
Member's explanatory statement
This amendment removes the provision requiring premises to be considered as vacant for the purposes of Part 10 when occupied by a trespasser (other than in cases caught by paragraph (b) of the same subsection, i.e. squatting in commercial premises).
Baroness Scott of Bybrook (Con)
My Lords, I shall speak also to Amendment 161A. Together, the amendments bring us back to an issue raised in Committee relating to premises that are counted as vacant. I thank the noble and learned Lord, Lord Etherton, and others for bringing this issue to our attention and for meeting me and my noble friend Lord Howe to discuss it. We have proposed amended wording to clarify what is meant by the clause in question.
Amendment 161 will clarify that occupation by true “squatters”—for example, persons who have broken into commercial high street premises and are using them as their residence—will not count as occupation for the purpose of assessing the vacancy condition for a high street rental auction, but occupation by other types of trespassers, such as commercial tenants who have remained in occupation following the expiry of their lease, may do so. This will be achieved by removing the reference to trespassers in Clause 183(4), while retaining reference to people living at premises not designed or adapted for residential use.
Amendment 161A adds words to the clause to clarify that “count” in this context means counting as occupation. I beg to move.
Baroness Scott of Bybrook
Member's explanatory statement
This amendment makes a drafting clarification.
Baroness Pinnock (LD)
My Lords, Amendment 282D in my name would require the Chancellor of the Exchequer to undertake a review of the business rates system. The Government know that the current system is flawed and fails to reflect modern business practices. There have been several Bills in the last few years that have tweaked the non-domestic rating system—as the Minister knows, we have one currently before the House—but these are just tweaks to a complex set of business taxation that is in desperate need of fundamental reform.
The system is basically flawed, as illustrated by the fact that the Treasury pays out billions of pounds in support of small businesses every year, via the small business rates relief. This demonstrates that there has to be a more effective way to levy businesses to support the local services on which they depend.
It is not only me saying that business rates need fundamental reform. Many business commentators have urged for a fundamental review. The Centre for Cities published a report in 2020 which proposed 11 changes to the business rates system. The IFS has published a report pointing to spatial inequalities that are “profound and persistent”.
A fundamental review is long overdue, and the amendment in my name simply asks that a review considers the effects of business rates on high streets and rural areas, and compares that information with an alternative business taxation system—for instance, land value taxation, which was referred to in the IFS report. The spatial inequalities explored in the report are at the heart of the levelling-up agenda. Any detailed review of business rates should gather relevant data on the impact of business rates on different parts of the country.
The Government have recognised what they have called “bricks vs clicks”, and in the Financial Statement earlier this year raised rates for warehousing. However, that steers clear of the major issue facing our high streets, which is the competitive advantage that online retailers have over high street retailers when it comes to the rates applied for business rates.
I have mentioned several times in this Chamber the glaring difference between warehousing for a very large online retailer, which may be at the rate of £45 per square metre, compared with the rate for a small shop in a small town of £250 per square metre. The change to raise the rates for warehousing does nothing to address that vast gap. For instance, it was reported that the change introduced this year by the Government cost Amazon £29 million. That might sound a considerable sum to some people, but it is pennies in the pot for a big online retailer such as Amazon. It really needs to start paying its fair share towards local services. Its little vans whizz round our streets, and Amazon needs to pay for the upkeep of them. The rate of its contribution is small in comparison to the services it uses. That is the argument for a huge, fundamental review of the system as is stands.
We also have to take into account the impact of any changes on local government. A large portion of a council’s income now derives from business rates, and any changes to the system by the Government to reduce the burden on businesses—which they did in the Statement by freezing the multiplier—results in compensation to local government for those changes. This again demonstrates that the system is not fit for purpose.
We currently have a system that says that these are the rates, but oh dear, they are too big for charities, small businesses and so on, and then provides relief which costs the Treasury billions of pounds a year. When any further changes are made, that has an impact on desperately needed income for local councils. Therefore, there will have to be compensation in that regard also. This demonstrates that the business rates system, as currently set up, is really not doing the job it needs to do. I repeat that a fundamental review is essential.
It is important to add that the way in which business rates income is demonstrated, via the tariffs and top-ups arrangements, creates further unfairness This becomes more noticeable as councils struggle to balance their budgets.
A business rates system that encourages business development and growth must be at the heart of any strategy to bring more prosperity and jobs to those areas defined in the White Paper as being the focus for levelling up. I do not need to spell out what that might mean, but it could perhaps be reduced rates for some areas, to encourage development and the movement of businesses to those areas.
The noble Baroness, Lady Taylor of Stevenage, raised similar issues in moving her amendment to support the pub industry, which we support. My noble friend Lord Scriven has signed the amendment in the name of the noble Lord, Lord Holmes of Richmond, who I do not think is in his place, regarding the establishment of regional mutual banks. We support this approach as another way of empowering regional businesses and entrepreneurs to take financial decisions which meet local ambitions, rather than the more risk-averse national banks. The noble Baroness, Lady Taylor of Stevenage, used the comparator of Germany. She is right that the mutual banks in Germany have done much to support their regionally-based industries, which does not happen in this country because of the way our banking system is set up.
I really hope the Minister will be able to say in her reply that the Government accept that the business rates system as currently devised is not fit for purpose and that they are looking to have fundamental review to reform it to the benefit of those places—because this is the levelling-up Bill, and I shall keep saying it: anything we do in the Bill should be in support of the levelling-up agenda. This does not do it, and that is why we need a reform of the business rates system.
Baroness Scott of Bybrook (Con)
My Lords, Amendment 163 in the name of the noble Baroness, Lady Taylor of Stevenage, concerns the support for our pubs. We are all aware of the importance of our local pubs; they provide space for people to come together, they provide jobs and they support local economies. But we also know that the past few years have been a challenging time for our pubs, with the Covid-19 pandemic and the current high prices, caused by Russia’s invasion of Ukraine, conspiring to put pressure on already tight operating margins.
Through the pandemic, we recognised that the hospitality sector needed to be more resilient against economic shocks. That is why, in July 2021, we published our first hospitality strategy, Reopening, Recovery and Resilience, which covers cafés, restaurants, bars, nightclubs and pubs.
In 2021—this is important for the issue raised by the noble Baroness, Lady Taylor, of listening to the sector—we also established a Hospitality Sector Council to help deliver the commitments set out in the strategy. The council includes representatives from across the sector, including UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping, as well as some of our best-known pub businesses. While we fully agree with the aim behind the noble Baroness’s amendment, the strategy she asks for already exists.
Moving on to Amendment 279, I notice that my noble friend Lord Holmes of Richmond is not in his place, but the noble Baroness, Lady Taylor of Stevenage, brought it up on behalf of the noble Baroness, Lady Hayman of Ullock, as did the noble Baroness, Lady Pinnock, on behalf of the noble Lord, Lord Scriven, so I will respond. The amendment would require the Secretary of State to report to Parliament within three months of Royal Assent on the existing barriers to establishing regional mutual banks in the United Kingdom and instruct the Competition and Markets Authority to consult on barriers within competition law for this establishment and identify possible solutions.
I make it clear that the Government are supportive of the choice provided by mutual institutions in financial services. We recognise the contribution that these member-owned, democratically controlled institutions make to the local communities they serve and to the wider economy. However, regional mutual banks are still in the process of establishing themselves here in the United Kingdom, with some now in the process of obtaining their banking licences. It is therefore too early to report on the current regime and any possible limitations of it for regional mutual banks.
I know that my noble friend Lord Holmes was interested in how regional mutual banks have performed in other jurisdictions and how we could use these examples to consider the UK’s own capital adequacy requirements. In this instance, international comparisons may not be the most helpful to make. The UK is inherently a different jurisdiction, with different legislation and regulatory frameworks from those in the US, Europe and elsewhere. Abroad, some regional mutual banks have been in existence for centuries and have been able to build up their capital base through retained earnings. In the UK, regional mutual banks are not yet established and are continuing to progress within the UK’s legislative framework.
Additionally, the Competition and Markets Authority plays a key role in making sure that UK markets remain competitive, driving growth and innovation while also protecting consumers from higher prices or less choice. It is very important to note that the CMA is independently responsible for enforcing UK competition and consumer law. The Government cannot instruct the CMA to undertake a consultation. The Treasury is continuing to engage with the mutuals sector and other industry members to assess how the Government can best support the growth of mutuals going forward. I hope that this provides sufficient reassurance to my noble friend on this issue.
Baroness Scott of Bybrook (Con)
I will quickly respond to the noble Baroness. I will look at what was discussed with the Hospitality Sector Council and will write to the noble Baroness. I am sure that all the other issues will be discussed further in the NDR Bill.