Financial Services and Markets Act 2023 (Prudential Regulation of Credit Institutions) (Consequential Amendments) Regulations 2025
(1 day, 6 hours ago)
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Lord Wilson of Sedgefield
That the Grand Committee do consider the Financial Services and Markets Act 2023 (Prudential Regulation of Credit Institutions) (Consequential Amendments) Regulations 2025.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, I will also speak to the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025. That order, which the Secondary Legislation Committee has identified as an instrument of interest in its 41st report, will bring the provision of environmental, social and governance ratings, commonly referred to as ESG, within the regulatory parameters of the FCA. Regulation will raise standards, enhance investor confidence and reduce the risk of greenwashing. It has strong support from across the financial sector.
I will outline the importance of ESG ratings and their role. ESG ratings encompass a range of products that seek to assess the ESG profile, characteristics, risk exposures or impacts associated with the company, fund or other financial instrument. ESG ratings are widely relied upon by investors to guide investment decisions, in line with sustainability risks, opportunities and preferences. Of the £10 trillion-worth of assets under management in the UK in 2024, half had integrated ESG factors into the investment process. More than 5,400 firms were using ESG ratings during that period.
Work with the ESG ratings market has developed rapidly and without formal oversight. This has prompted concerns among stakeholders regarding transparency, governance, internal control and potential conflicts of interest within ESG ratings providers. In response to these concerns, the International Organization of Securities Commissions published recommendations for ESG ratings and data providers, emphasising the need for higher standards and appropriate oversight. The Government have acted swiftly to deliver progress on this important agenda. The consultation was issued by the previous Government in June 2023, and this Government ensured that the consultation response and draft legislation were published for technical comments as part of the Chancellor’s first Mansion House speech in November 2024. That draft has since been refined into the instrument before the Committee today.
I now turn to the instrument itself. It establishes a new regulated activity: the provision of an ESG rating where that rating is likely to influence the decision to make a specified investment. Providers of ESG ratings will therefore be required to obtain authorisation and will be subject to supervision by the Financial Conduct Authority. Recognising that ESG ratings are provided by a range of different persons, the scope of the regulated activity is designed to be proportionate to the risk of harm to avoid dual regulation and to maintain consistency within the existing regulatory framework.
The regulation contains specific exclusions to give effect to this—for example, where a firm provides ESG ratings as part of another regulated activity. To uphold the integrity of the UK market and ensure a level playing field, the ESG ratings provided to a UK customer by an overseas provider will fall within the scope of the regulated activity, except where such ratings are provided without remuneration or financial incentive.
The Government remain committed to open, competitive and internationally connected financial markets. In that context, further consideration will be given to market access arrangements for overseas ESG ratings providers. To allow sufficient time for industry engagement while ensuring timely implementation, the FCA launched its consultation on the specific regulations for ESG ratings providers on 1 December following the laying of this instrument on 27 October. The FCA’s consultation has been welcomed by industry, and its rules will be designed to be proportionate and tailored to address harms while protecting innovation, in line with the regulator’s secondary growth and competitiveness objective.
This legislation forms a central element of the Government’s agenda to promote growth in the UK sustainable financial market—one of the priority areas identified in the Financial Services Growth and Competitiveness Strategy.
I turn to the Financial Services and Markets Act 2023 (Prudential Regulation of Credit Institutions) (Consequential Amendments) Regulations 2025. This technical instrument makes changes to support reforms to UK banking regulation. It will keep our legislation on financial services effective and assist the Treasury in applying the FSMA model of regulation to set a prudential framework for banks. The instrument does not introduce any new regulatory requirements for firms.
Noble Lords will be aware that banks are required to follow a set of prudential regulations to manage their risk appropriately and maintain adequate levels of capital to protect against any losses. In addition, the biggest banks are required to hold additional loss-absorbing debt to ensure that they can be allowed to fail without the need for taxpayer-funded bailouts, as we saw in the global financial crisis.
A significant amount of prudential regulation is set out in the Capital Requirements Regulation, or CRR, which formed part of domestic law during our time as an EU member state. Following our exit from the EU, the Government have been tailoring the existing financial services framework to the UK’s needs. This includes the CRR, which will be removed from the statute book and largely restated in the Prudential Regulation Authority’s rulebook, providing more flexibility and allowing the PRA to set the relevant requirements. To do this, legislation has been passed to revoke the CRR, notably the Financial Services Act 2021 and the Financial Services and Markets Act 2023. Subsequently, this July the Government made commencement regulations to revoke certain articles of the CRR, with effect from 1 January 2026.
In that context, the Government have brought forward these technical regulations to make a small number of consequential amendments to pieces of legislation that refer to specific CRR articles, to ensure that the broader legislative framework remains coherent. Specifically, they amend the Banking Act 2009 to ensure that definitions relating to share capital instruments in banks’ own funds reflect the revocation of certain CRR articles. They also make changes to secondary legislation concerning bank resolution, the bank levy and financial conglomerates to reflect the revocation of certain CRR articles.
In summary, while this statutory instrument is technical in nature and does not introduce any new rules, it is nevertheless a necessary step in continuing the reforms to our banking regulation and ensuring that our regulatory framework remains coherent. I beg to move.
Lord Jones (Lab)
My Lords, surely these instruments must be welcomed, and surely we all want a smarter regulatory framework. I thank the Minister for his helpful and concise outlining of the regulations and the order. There is a lot of business ahead and time is of the essence, so my brevity is guaranteed.
One can only welcome the policy context as stated at paragraph 5 of the helpful Explanatory Memorandum. Can my noble friend the Minister or his department say what the Prudential Regulation Authority is? In particular, can he perhaps give some detail on how big it is and who sits on it? Who chairs it and, on the presumption that the chair is full-time or part-time, is he or she salaried and how much are they paid? Are all the PRA membership paid or are they voluntary? How often does the PRA meet? The department may not give answers now but if not, might the Minister reply by letter?
Baroness Kramer (LD)
My Lords, I will take these two statutory instruments in the order in which they are on the Order Paper, which is the reverse of the Minister’s discussion. That is not a criticism; it is just to explain where I am starting from.
The first of these two SIs removes the current assimilated law on capital requirements for banks, building societies and investment firms and replaces it with rules to be set solely by the regulator—in this case, the PRA. In effect, it removes the control of capital requirements from any intervention by Parliament. As always, I want to register my concern that an issue of fundamental importance to the financial stability of the country is, in effect, being removed from any meaningful parliamentary oversight or action.
The regulators may be experts, but they got it terribly wrong in the 2000s by misunderstanding CDOs, which triggered the financial crash of 2007-08, and by not recognising the precarious state of liquidity or lack thereof in many of the big banks, which worsened the crisis. They also turned a blind eye to the manipulation of Libor benchmarks, which damaged the UK’s reputation for integrity in financial services in ways that are still with us today—never mind, frankly, the financial damage to so many clients across the globe. Recently, the PRA has been permitting an erosion of capital requirements, almost certainly to fit with the Government’s agenda for short-term growth, rather than being based on any evidence of risk reduction, which I have looked for and cannot find.
I sat on the Parliamentary Commission on Banking Standards that examined the 2007-08 crash for nearly two years. We predicted that amnesia about how risk actually works would set in. I note that the banks are using the new leeway provided by looser capital requirements to leverage private equity funds, even though they cannot assess the risks embedded in those funds, which are, by definition, not transparent. However, of course, we recognise that those funds pay the banks’ substantial fees. It is all so predictable.
The second SI makes provision for environmental, societal and governance ratings, as related to investments, to be set in the rulebook of the FCA. Once again, what is properly a policy decision will escape parliamentary oversight and intervention. Clear rules will be welcomed by investors, but this is a contentious area. Is nuclear included? Is carbon capture and storage included? Is defence green? I am not answering those questions; I am saying that those questions naturally arise. In the Commons debate on this SI, the Conservatives basically reflected a Trumpian view of oil and gas investments—the “burn, baby, burn” view. Is that the view the FCA will follow, or will the Minister say to me, as I think he must, “That’s not up to Parliament; it’s up to the FCA”? The investment market is an international one and, frankly, investors care much less about what the rules are and much more about whether they are globally consistent. How will the FCA rules sit with the new anti-green US approach? The EU has a new ESG framework, which comes into effect in 2026. How will the UK rules sit with that? How will the UK’s overseas recognition regime work—the Minister referred to it—and what will be its parameters and consequences?
Surely, Parliament should have more of a view than just being one of the many consultees, which seems to be the current position. I continue to be very concerned about the direction of travel away from legislation, with debate, oversight and parliamentary responsibility, to rulebooks in the sole control of the regulators.
Baroness Neville-Rolfe (Con)
My Lords, I, too, rise to speak to the two statutory instruments: the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025, and the Financial Services and Markets Act 2023 (Prudential Regulation of Credit Institutions) (Consequential Amendments) Regulations 2025.
I am content with the second of these instruments, but I have some broader questions which it may be helpful to address first. My first question is a repeat of one posed in the summer. How is the Treasury getting on with the post-Brexit regulatory changes for which it is responsible? The answer in the summer was that 51% of assimilated law from the retained EU law and assimilated law dashboard had been dealt with. It seems extraordinary not to have completed this task more than nine years after the vote on Brexit. A second question is, now that we are no longer bound to match the EU, have we taken advantage of the obvious opportunities? I highlight helping smaller financial service providers and banks, addressing the perennial problem of finance for SMEs, and encouraging innovation. I look forward to hearing from the Minister on this, and on the progress of the Government’s financial services growth and competitiveness strategy, including the welcome announcement on 4 December on plans to lower barriers to authorisation for new firms.
That brings me to how our onshored EU law is being replaced by regulator rules, and how Parliament can maintain proper oversight of it. Can the Minister tell us how the Treasury and the regulators are co-ordinating the mapping exercise from the EU’s capital requirements regulation provisions into our PRA rulebook? In particular, how are the Government assuring themselves, and by extension this House, that the cumulative effect of these changes will preserve and enhance the safety and soundness of firms—a concern of the noble Baroness, Lady Kramer—and the competitiveness of the UK as a financial sector, which, given its sheer scale, is critical to the future of our country? The noble Baroness explained the importance of continued parliamentary involvement, rather than leaving everything to the regulators and their rule books. Does our Financial Services Regulation Committee, with its distinguished membership, perhaps have a role to play?
As we move further into the FSMA 2023 framework, what is the Government’s plan for post-implementation review? I know from my business experience that for success, implementation far outweighs strategy. Will the Treasury undertake a structured evaluation of whether the shift from detailed retained law to rules made by the regulator is delivering the outcomes envisaged by Parliament: high standards of prudential regulation, clear and accessible rules for firms, and a regime that supports innovation and growth? The noble Lord, Lord Jones, said he wanted to see a smarter regulatory framework, and I will be interested in the Minister’s reply. These are, I hope, constructive and broadly supportive questions.
I turn to the instrument on ESG ratings. As the Minister has said, this market has grown rapidly in recent years without formal regulatory oversight. That has inevitably led to concerns being raised around transparency, governance arrangements, internal controls and potential conflicts of interest for ESG rating providers. Both the International Organization of Securities Commissions and the OECD have recommended that national authorities bring greater scrutiny to bear on this part of the market, and I suppose that the UK was bound to fall into line. I understand the need to ensure that ratings are given in a proper way for market integrity, although I regret that the market has not sorted itself out voluntarily—though that may be difficult, given that so many territories are involved.
I am not convinced about the evidence base for intervention, in terms of harms caused by incorrect ESG ratings. I also question why the Government have defaulted to bringing organisations into the FCA’s sphere using the Financial Services and Markets Act 2000 rather than the simpler and less costly designated activities route, which the 2023 Act created. Why have the Government not started with making ESG ratings a designated activity to see whether that could cope with the issues satisfactorily? The Explanatory Memorandum simply asserts that full regulatory oversight is necessary. This is against a background of an
“entrenched culture of risk aversion”
and regulatory complexity, in the words of the House of Lords Financial Services Regulation Committee. I believe that the FCA route on ESG risks adding such needless complexity. I am sure that the Minister will want to answer this point. The Prime Minister has focused as recently as last week on the importance of growth and lighter regulation, which, as the Minister knows, I welcome. Is there a left hand/right hand issue underlying today’s apparently technical discussion? Is this use of the 2000 Act rather than the 2023 Act the direction of travel for the future? Will that deliver the simpler, smarter regulation that many of us crave?
For similar reasons, I am cautious about the state telling the market whether such ratings ought to be used at all. Companies and investors must remain at liberty to make a business decision on whether ESG ratings add value to their processes. In my view, it is not the role of government or regulators to favour particular investment philosophies or to promote one set of metrics over another. Against that background, can the Minister confirm that it is not the Government’s intention that the FCA, through its supervisory expectations or guidance, should in practice encourage or pressure firms into using ESG ratings or into favouring particular ESG ratings providers or methodologies? In other words, can the Minister assure the Committee that the regime is about the integrity of the ratings, where they are used, rather than about mandating or promoting their use?
In the same vein, can the Minister say what safeguards will be in place to ensure that ESG ratings are not indirectly hard-wired into other parts of the regulatory framework—for example, into prudential rules, disclosure regimes or stewardship expectations—in a way that would amount to de facto regulatory endorsement of specific ESG approaches without further and explicit parliamentary scrutiny? The Minister mentioned that this ESG instrument has been supported by business. Which businesses? Did they include SMEs and their representatives?
I end with a thank you. It is helpful that the Government regularly come to the House and explain the purpose of the panoply of financial regulations that are being made. This is a major constitutional and regulatory transition—hence it is right that we have the chance to examine carefully each step in the process, its progress and its broader impact. The sunlight of transparency makes for better government and better regulators.
Lord Wilson of Sedgefield (Lab)
My Lords, I thank noble Lords and noble Baronesses for the one or two questions that I have been asked. I will do my best to get through them all; I very much doubt that I will, as they came thick and fast, but, obviously, we will scour Hansard and respond by letter to anything to which I do not respond.
First, I thank my noble friend Lord Jones for his questions about the PRA. There were some questions about its consistency and how it works institutionally; I can write to him about that. The PRA produces an annual report in which all the costs and everything else that my noble friend asked about are laid out, but, if the answer is not in there, I am sure that we can come back with an answer to his question. I am pleased that he welcomes the statutory instruments that we have here.
The noble Baroness, Lady Kramer, asked a lot of precise questions, which I will try to answer. The main thing I took away from what she said was partly to do with parliamentary oversight: whether we have forgotten what happened in 2008 and why we are essentially allowing the regulators to take over on prudential regulation. Basically, we are revoking the capital requirements regulations, allowing the PRA and FCA to set rules relating to the prudential regulation of banks. Parts of the CRA were revoked in July 2025 and this will come into force on 1 January next year. This SI makes consequential amendments relating to the parts of the CRA revoked in July. This is necessary to ensure that the statute book functions properly, and there is nothing in this SI that is additional to what was there before. Obviously, the Leeds reforms and the Basel 3.1 reforms will ensure that these transitional measures will work into the future.
I turn to the questions from the noble Baroness, Lady Neville-Rolfe. On adjusting to being outside the EU, it has been nine years since the referendum; we have been in power for just over one of those years, so the question is what happened in the previous eight years to get us to the position where the noble Baroness thinks we should be.
There were also questions about cutting regulation on firms by 25%. This Government are committed to cutting administration. The Financial Services Growth and Competitiveness Strategy set out the Government’s plans to stabilise the streamlined regulatory framework for sustainable finance, prioritising policies that will have the greatest impact. This SI is one of those priorities. It improves clarity around the ESG rating methodology, giving investors greater confidence in their decisions. It will also promote more accurate understanding of how companies are evaluated. That is why the sector itself has been strongly supportive of the proposed regulations: 95% of those consulted supported them. In the Mansion House speech in November 2024, the Government published the consultation response and draft legislation, and we are now following on from that. Some 5,400 UK financial services firms now use ESG ratings.
As far as the international context is concerned, the EU will regulate ESG rating providers from July 2026. I believe that two or three other countries—Japan, Hong Kong and Singapore—have a code of conduct on this, and I think India is taking a similar approach.
Both noble Baronesses raised the Government’s delegation to the FCA of rules about transparency. What we have done is in line with the UK’s general approach to financial services regulation. This is founded on the Financial Services and Markets Act 2000, under which Parliament sets the overall policy framework, with the detailed regulatory requirements set by the expert independent regulators. The regulators are required to conduct an open and transparent consultation process, which includes undertaking a rigorous cost-benefit analysis before introducing new rules. The regulators are also required to keep their rules under review and to provide clarity and transparency to stakeholders now and when the rules are reviewed. They must also stay within the parameters of the statutory requirements.
As far as parliamentary scrutiny is concerned, the FCA is an independent body. It is a non-governmental public body and its independence as a statutory regulator is vital to its role. However, it is fully accountable to the Government and Parliament as to how it exercises its functions. This accountability is critical in ensuring that the FCA is advancing the objectives that are given to it by Parliament. Senior representatives of the FCA regularly give evidence to parliamentary committees. The Financial Services and Markets Act 2023 introduced secondary growth and competitiveness objectives for the FCA. This creates a clear legislative framework for the regulator to follow.
Baroness Neville-Rolfe (Con)
I thank the Minister so much for saying that he will look at the details—we asked a lot of detailed questions—and follow up, as he has done on previous occasions. That is extremely helpful and much appreciated.
I want to come back on a couple of points which might be the subject of correspondence. First, on the pace of change, this 51% and how we are getting on, I appreciate that we were in power for a lot of the time. However, there is a common wish that the regulatory regime should be up to date. We did a lot of work and some of that the Government have, fortunately, moved forward with. How are we getting on?
Secondly, I focused on small business because smart regulation is so important to small business. The Minister did not talk much about that. Could he follow up a little more on the good things that I think are planned? On ESG, he mentioned the number of firms. Does that mean that there is a de minimis rule with ESG? If so, I would be interested to know whether small companies are not covered by this regulation—or will they get a lot of extra burdens as a result of rules that are not that relevant?
The Minister did not really answer on why we are using the 2000 Act rather than the 2023 Act. The Treasury has done it this way for this instrument, and I understand that. I am interested to understand why it is being done that way and whether there would be a quicker, smarter approach using the powers in the 2023 Act as well. But with that, I thank the Minister for his full and helpful reply.
Lord Wilson of Sedgefield (Lab)
In response to that, we are using the legislation that we are using essentially because it is the appropriate piece of legislation that we need for what we are introducing today, but I will obviously give her a fuller answer on why that is. As far as small businesses are concerned, 5,400 UK financial service firms used the ESG ratings in 2024. The FCA analysis said circa 80 providers are active in the UK ESG ratings market, with potential growth of up to 150 providers. Globally, the top five providers represent 75% of the market. That is the make-up of the industry. As to whether the small companies were consulted, we can get that information to her.
Baroness Neville-Rolfe (Con)
I am interested in the impact of the regulations on the financial services people less than on the ESG companies themselves. The ESG companies are providing services. Some of them will be small firms; that is fine. In terms of growth and innovation—the sort of objectives that are rightly set out in the strategy—is that holding back London in an inappropriate way?
Lord Wilson of Sedgefield (Lab)
I do not think that it is holding back London and the City of London in any way whatsoever. What is important is that we have the right regulation on this. The consultation that we took part in was not just among the regulators; it was with trade bodies et cetera. It was a wide consultation. I am sure that I can get a more detailed response on the consultation to the noble Baroness.
Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025
Lord Wilson of Sedgefield
That the Grand Committee do consider the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025.
Relevant document: 41st Report from the Secondary Legislation Scrutiny Committee
Procurement Act 2023 (Specified International Agreements and Saving Provision) (Amendment) Regulations 2025
(1 day, 6 hours ago)
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Baroness Anderson of Stoke-on-Trent
That the Grand Committee do consider the Procurement Act 2023 (Specified International Agreements and Saving Provision) (Amendment) Regulations 2025.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, the purpose of this statutory instrument is to implement the procurement chapter commitments of the UK-Iraq partnership and co-operation agreement and the UK-Kazakhstan strategic partnership and co-operation agreement. Both agreements are part of the UK’s ongoing continuity trade programme following our exit from the EU.
The UK’s trade continuity programme aimed to replicate existing EU trade agreements with partner countries after the UK left the EU. The goal was to ensure that businesses, consumers and investors maintained stability and access to benefits such as preferential tariffs. These are two of the last remaining trade agreements to be updated, and the SI before the Committee today implements the procurement chapters of those agreements.
The UK-Iraq PCA and UK-Kazakhstan SPCA establish frameworks to govern our trade and economic relationship with Iraq and Kazakhstan. The UK-Iraq PCA was signed during Prime Minister Sudani’s historic visit to the UK in January 2025 while the UK-Kazakhstan SPCA was signed in April 2024 by the previous Government. The procurement chapters of these agreements broadly replicate the standards and market access commitments of the original EU agreements. Some of the language has been tweaked, however, better to reflect the specific bilateral context between the UK and these two countries.
The key distinction between the Iraqi and Kazak agreements is that the procurement market access commitments in the UK-Kazakhstan SPCA can be considered to be broadly equivalent to that of the WTO government procurement agreement, to which Kazakhstan is currently in the process of acceding. However, the market access levels in the UK-Iraq PCA are lower than this as they include only access to central government entities.
As part of the process under the Constitutional Reform and Governance Act, to enable parliamentary scrutiny of treaties, both agreements were laid in Parliament on 9 July 2025. The agreements cleared the CRaG scrutiny process on 16 October, and this statutory instrument was subsequently laid on 21 October. The procurement chapters of these agreements can take effect only once the agreements have been implemented in domestic legislation. This statutory instrument will achieve this by updating Schedule 9 to the Procurement Act 2023 to implement in domestic law the UK’s procurement obligations under both agreements. By our adding these agreements to Schedule 9, suppliers entitled to benefit from them will be considered “treaty state suppliers” under Section 89 of this Act. This will provide them with UK public procurement access and rights equal to those afforded to UK suppliers. In turn, the agreements require Iraq and Kazakhstan to provide equivalent access to UK suppliers.
The Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024 are also being amended to ensure the UK’s obligations under both agreements apply in relation to contracts that can still be entered into under the previous procurement regime.
The territorial extent of this instrument is the United Kingdom. The territorial application of this instrument in relation to contracts under the Procurement Act 2023 extends to England and Northern Ireland. The same extends to Scotland, but not in respect of procurement carried out by a devolved Scottish authority. The same extends to Wales, but not in respect of procurement regulated by Welsh Ministers. The Welsh Government are therefore making a separate statutory instrument to implement these agreements in respect of procurements regulated by Welsh Ministers. The Scottish Government will be implementing these agreements separately under their own legislation in respect of procurement carried out by a devolved Scottish authority. Finally, the territorial application of this instrument in relation to contracts under the previous procurement regime extends to England and Wales and Northern Ireland.
I hope noble Lords will join me in approving this SI today, which helps to update and strengthen our relationship with both Iraq and Kazakhstan. I beg to move.
Baroness Finn (Con)
It looks as though it is the “Baroness Anderson and Baroness Finn show” again. I am grateful to the Minister for setting out the measures before us today. These regulations amend Schedule 9 to the Procurement Act 2023 to implement the procurement chapters in the new partnership and co-operation agreements with Kazakhstan and Iraq. By adding both agreements to Schedule 9, the instrument ensures that suppliers from those countries are treated as treaty state suppliers and that the United Kingdom can meet the procurement obligations we have entered into.
This is a pragmatic measure that helps maintain stability and consistency in the UK’s post-Brexit trading relationships. The agreement with Kazakhstan, as the Minister pointed out, was concluded under the previous Conservative Government and it is right that its implementation be now brought to completion.
The Minister said that the procurement provisions in these agreements broadly replicate arrangements that existed under the previous EU agreements. That continuity provides reassurance for contracting authorities and businesses operating across borders. Unsurprisingly, therefore, the instrument attracted no comment from the Secondary Legislation Scrutiny Committee and was not drawn to the attention of either House by the Joint Committee on Statutory Instruments.
While the regulations are narrow and technical, they reflect the wider importance of procurement arrangements for British businesses operating internationally and for the reciprocal access they secure overseas. On that principle, we are aligned with the Government. I would, however, be grateful if the Minister could provide three brief points of clarification. First, nothing in these regulations diminishes the need for contracting authorities to apply proper due diligence, national security checks or sanctions compliance. It would be helpful if the Minister could confirm that further guidance will be issued to ensure that contracting authorities understand the risk profile associated with new treaty state suppliers.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I welcome you all to the “Baroness Finn and Baroness Anderson show”. I am delighted that you are here with me.
I thank the noble Baroness, Lady Finn, for the very pertinent points raised. I am waiting for a magic piece of paper, and if it does not arrive in the next 30 seconds, I will have to write to the noble Baroness. The one point I can respond to is on the divergence of and impact on the devolved Governments. As I made clear in my opening remarks, there are complicated elements that Wales and Scotland need to legislate for directly, but there should be no divergence from this legislation. On the timescale of those legislative actions, I will have to write to the noble Baroness—but there is at least one magic piece of paper coming my way. Scotland has already implemented the Kazakhstan agreement and will be doing the Iraq agreement early next year. Wales’s will be implemented directly after the UK; that will come into force the day after the SI gets Royal Assent.
I have been given another, absolutely magic piece of paper—anyone would think it was Christmas—and I can now answer on whether the Government intend any changes regarding evidence in regulations to be communicated to suppliers and potential suppliers based in the UK, and when the updated guidance will follow. The FCDO will issue public communications once both agreements are ratified, alongside any guidance for suppliers. Once the agreements are enforced, they will be available to view online in the treaty series of command papers available on GOV.UK. Interested persons can also apply for monthly updates on treaties by signing up to the FCDO’s UK treaty action bulletins, which I am sure, after listening to this speech, many colleagues will wish to do. On the other points, I will write to the noble Baroness.
The Government are committed to enhancing our bilateral relationships with Iraq and Kazakhstan so that they go beyond security to include strength and co-operation on trade and the economy. As I said earlier, the purpose of this SI is to implement the procurement chapter commitment of the UK/Iraq: Agreement on Partnership and Cooperation and the UK/Kazakhstan: Strategic Partnership and Cooperation Agreement. This will provide Iraqi and Kazakh businesses with access and rights to UK public procurement equal to that afforded to UK suppliers. In turn, the agreements require that Iraq and Kazakhstan provide equivalent access to UK suppliers. I am grateful for the support of the Opposition, and I beg to move.
Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025
(1 day, 6 hours ago)
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Baroness Sherlock
That the Grand Committee do consider the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I am pleased to introduce this instrument. Subject to the approval of this Committee, these regulations will be another significant step forward in the reform of our occupational pensions framework, building on the foundations laid by the Pension Schemes Act 2021 and the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022. The primary purpose of these regulations is to extend the legal framework for collective money purchase schemes—commonly known as collective defined contribution, or CDC, schemes—to allow multiple unconnected employers to participate. Until now, CDC schemes have been restricted to single employers or groups of connected employers.
I have been advised that there are two minor drafting errors in Schedule 2 to the SI as laid in draft, resulting in two cross-headings before paragraph 2 where there should be only one and a repetition of “regulation” in paragraph 2. The intention is for these to be corrected in the version that is made so that there is a single cross-heading reading “General” and a single appearance of the word “regulation” in paragraph 2. I apologise for these errors, but I assure the Committee that these corrections do not change the legal meaning of Schedule 2 in general or paragraph 2 in particular.
Before I move on to the detail of this instrument, it may be helpful if I give some context. The Pension Schemes Act 2021 provided the statutory framework for CDC schemes in the UK. The Government believe that CDC schemes have an integral role to play in addressing the challenges faced in our pensions system, so long as the guiding principle is to ensure that we protect the interests of members. Although good progress has been made, four in 10 working-age people are under-saving for their retirement. CDC schemes can help address this issue: by pooling longevity and investment risk across the membership, such schemes have the potential to target higher investment returns for their members than a DC scheme. CDC schemes also have potentially infinite investment horizons and no need to lifestyle investments, which means they can invest productively for longer. Industry modelling suggests that CDC schemes could boost retirement income by anywhere between 25% and 60%. The Committee will agree, I am sure, that if such increases in returns were realised, CDCs could really help address the issue of inadequate retirement incomes.
CDCs can support the wider economy, too. Longer investment horizons mean greater investment in vital UK infrastructure and the technologies of the future, such as renewable energy. Pooling can also shield savers from much of the uncertainty and risk faced by members of DC schemes, which is especially important as they approach retirement. CDC schemes offer members a seamless transition from saving into receiving a trustee-managed retirement income. We know that many people do not want—and, indeed, feel ill-equipped—to make complex financial decisions at retirement. Some 72% of DC members want a pension income yet 50% of pots are taken fully as cash, exposing them to individualised longevity risk. CDC schemes provide a target income for life and will target at least inflationary increases in member benefits at a scheme’s outset, helping members’ money keep pace with the cost of living through their retirement.
The Government want to ensure that as many savers as possible can take advantage of these benefits. That is why we have introduced this legislation. This instrument opens the door for broader adoption of CDCs: it will allow different, unconnected employers to participate in the same scheme, including smaller employers who lack the scale or expertise to go it alone. It also opens the door to CDC being a solution for specific sectors and for commercial schemes. For employers, the benefits are clear. Their liability is no greater than in a DC scheme, with contributions being made in the same way. Yet, with the aforementioned benefits, CDC schemes can be a valued employee benefit, allowing employers both to attract and retain talent in a competitive labour market.
I will now dive into the detail of this instrument, and there is, of necessity, plenty of detail. Despite the successful launch of the Royal Mail collective plan last year, CDC remains a relatively novel concept. It is critical that employers and their employees can have confidence in CDC pensions. The Government therefore make no apology for this instrument setting a high bar for entry. The robust authorisation and supervisory framework introduced by this legislation means employers can be confident they are joining well-run, well-governed schemes.
Part 2 of this instrument removes the exclusion in the Pension Schemes Act 2021 which limits the schemes that can be collective money purchase schemes to schemes used, or intended to be used, by single or connected employers. This allows for the creation of unconnected multiple employer schemes. Part 2 also amends the definition of a qualifying scheme, so that a broader range of organisations can set up a collective money purchase scheme. This will enable commercial organisations to establish unconnected multiple employer schemes.
A scheme applying for authorisation must satisfy the regulator that it meets the authorisation criteria. These criteria are listed in Section 9(3) of the Pension Schemes Act 2021. Part 2 amends the existing authorisation criteria in the 2021 Act and thereby creates additional criteria, specifically for unconnected multiple employer collective money purchase schemes. We have identified persons that we consider will have important roles in unconnected multiple employer CDC schemes and have brought these people within the scope of the “fit and proper persons” test, so that they are subject to appropriate scrutiny.
Regulation 10 amends the 2021 Act to require that the scheme has a single scheme proprietor meeting specific criteria and the specific requirements set out in new Section 14C of that Act. As we are seeking to extend CDC provision to unconnected multiple employer CDC schemes, we know there will be new entities involved in the operation and funding of these new types of CDC scheme. We want to ensure that any financing required to meet relevant costs is credible and realisable, so that it is available at the point of need. Therefore, the scheme proprietor’s ability to deliver such financing will need to be assessed by the regulator, both at authorisation and on an ongoing basis.
Regulation 10 of the instrument also inserts a business plan requirement under new Section 14A of the 2021 Act. The scheme proprietor would be required to prepare, maintain and submit a business plan to the regulator, which will include the key financial information for its financial sustainability assessment. The detailed content of the business plan is set out in newly inserted Schedule 1B to the 2021 Act.
These regulations will permit schemes that intend to operate on a commercial basis. This will involve acquiring new business through the promotion or marketing of their scheme. To mitigate the risk of schemes overpromising to gain a commercial advantage, or mis-selling, we are introducing a new promotion or marketing authorisation criterion for these schemes. The requirement is that no person has carried out promotion or marketing of the scheme that is unclear or misleading without rectification, and that the scheme has adequate systems and processes for ensuring that its promotion or marketing is clear and not misleading.
We also want trustees of these schemes to focus entirely on the interests of the scheme members and to have complete autonomy to do so. If the trustee were also to act as a person who promotes or markets the scheme, or as the scheme’s CFO, it would detract from that responsibility and create a clear conflict of interest. Regulation 5 makes a separation of these roles a criterion for authorisation. The Government’s intention is that running an unconnected multiple employer CDC scheme as a closed scheme should always be an option open to trustees, where it is viable to do so, and to the extent permitted under wider legislation. Regulation 5 therefore inserts a new authorisation criterion into the 2021 Act to ensure that trustees can choose this option if appropriate.
Finally, on Part 2, Regulation 6 imposes a mandatory deadline of 24 months from authorisation by which an authorised unconnected multiple employer CDC scheme must start being operated. This is to deter speculators. We want only people or organisations that are fully committed to providing well-run and soundly designed unconnected multiple employer CDC schemes to apply for authorisation.
Part 3 of this instrument supplements the meaning of “connected” in Section 49(2)(a) of the Pension Schemes Act 2021. This is relevant for determining whether a collective money purchase scheme is a single and connected employer scheme or an unconnected multiple employer scheme and therefore which of the two legislative frameworks applies to it.
Lord Davies of Brixton (Lab)
We have here the interaction of a number of different pieces of legislation. Of course, we are all looking forward to the Second Reading of the Pension Schemes Bill next week. We have before us the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025. We also have the 2022 regulations that first set out the regulatory requirements for CDC schemes. In parallel, we have the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations. As the Minister and the Front Bench well know, that sets out another of the Government’s initiatives: to provide CDC schemes that can offer retirement pensions, rather than people having to buy annuities. All these different pieces of legislation interact in ways, I think it is fair to say, that are sometimes difficult to grasp.
What worries me about these regulations is that it is a bit like when you have extensive building work in your house, and the architect asks you where you want the light switches. Of course, you do not know where you want the light switches until you have lived in that house for two or three years, but you have to decide in advance. This is my concern about these regulations: we do not know how these schemes will work in practice. We are all agreed that they are a good thing, we want to see them supported and developed and we have to start somewhere, but certain aspects of what is before us today cause me some concern—or, to tone it down, some level of interest.
First, is it clear that the provisions in the Pension Schemes Bill dealing with value for money, guided retirement and particularly scale will apply to these schemes? They are closer to these schemes than they are to defined benefit. It is quite clear in the legislation that the scale requirement applies to DC arrangements. To what extent will the scale requirement directly, or indirectly through the supervision requirements, end up requiring schemes of a particular scale? My fear is that, if there is a scale requirement, it will just be another barrier to establishing these schemes that, in practice, we all want.
An associated point that has been raised is that we are now effectively getting separate CDC regimes. The existing one with the Post Office scheme is the only live example, and that is very scheme specific. We do not know how far the legislation can cover other sorts of single-employer CDC schemes. Then we have the multi-employer scheme regime and the retirement pension CDC regime. Are these regimes completely separate? To what extent is there going to be scope to make transfers from one regime to another? Are these regimes overlapping or are they distinct?
One problem is always raised. I am a strong supporter of CDC arrangements. It should be the future of private sector pension provision and we want to encourage it as much as possible, but there are problems with the way it works in practice. Ultimately, however deep it is hidden down in the workings and however many formulae you adopt to ensure fair treatment, there is always the risk of some form of cross-subsidy between members. There will be winners and losers.
With multiple employer CDCs, there is also the possibility of cross-subsidy between employers. It is inherent in the approach, in my view. I know supporters of CDC argue that it is not the case, but I think you should always be concerned about the fear of that. We do not know, because so many of the supervisory powers are given to the regulator, the detail of how they are going to be applied. Will it be made clear that this will not be an impediment to developing these sorts of arrangements? The important point is communication. We need to be clear in the regulations about the need for full and adequate communication so that potential members are fully aware of the nature of the arrangement they are entering.
My final concern is that we are heading towards a retailisation of this sort of provision. It will become a retail product, and that is not how I and many other people envisaged CDC operating. It should be a collective endeavour. I must admit that I have an instinctive reaction against the use of the word “proprietor” for the sponsor of these arrangements. I would prefer the word “sponsor”, because “proprietor” implies that it is not a collective arrangement but a commercial one.
Clearly, it will cost money to set up these arrangements and, to a certain extent, the complexity introduced by these regulations means that even more money will be required to do so. But my fear is that we will ultimately end up with underregulated insurance companies, rather than the collective and co-operative arrangement that I think is the true way forward for CDC arrangements. My fears are that it is all too complicated. We need to be clear about the overlap between these different areas of legislation and the different types of CDC arrangement. A system in which people have the right to transfer their money out of a scheme at the same time as the Government are encouraging schemes to invest in non-market based investments, means that there is a contradiction, which could be the Achilles heel of this type of arrangement.
I am taking this opportunity to express my concerns and raise them formally with the Minister. The specific questions are about multiple CDC arrangements, information communication requirements and an approach which enables people to understand what they are getting here—it is better than pure DC.
My final complaint is that the regulations persist with the business of calling these schemes “collective money purchase”. I have made the point before in these discussions that they are not collective money purchases. They are called money purchase schemes because you purchase an annuity, and these schemes are being set up specifically with the introduction of retirement-only CDCs so that you do not have to buy an annuity. I am really sorry that the department has persisted in using the term “money purchase” in these regulations when they are clearly not money purchase arrangements.
Viscount Younger of Leckie (Con)
My Lords, I am pleased to speak in this debate on the regulations extending collective defined contribution schemes to unconnected multiple employer arrangements. I say at the outset that I accept the apology given by the Minister for the changes needed in Schedule 2. I hope that when she responds she will confirm that these are minor changes, as I assume they are; that would be helpful.
By any measure, this is a highly technical statutory instrument that even seasoned pensions professionals would concede is difficult to absorb on first reading. Yet precisely because of that complexity, and the potentially far-reaching implications for the architecture of our pensions system, it is essential that this Committee scrutinises it with particular care. Collective defined contribution schemes—CDCs—are an important and promising innovation. They offer the potential for better outcomes than pure defined contribution schemes for risk-sharing across generations and smoothing investment volatility in retirement. They could and should play a larger role in the future of pension provision in the United Kingdom.
We also recognise that this SI is an enabling vehicle. It is a mechanism to broaden the CDC framework so that unconnected employers may participate. We raise no objection to that direction of travel. I am surprised that this debate will not have more contributions from other Peers. I am very pleased that we have the welcome and regular presence of the noble Lord, Lord Davies. I am quite surprised that we have no representation from the Liberal Democrats. I am not sure why that is.
Baroness Sherlock (Lab)
My Lords, I am grateful to the Committee for the handful of questions that has been offered up. I share with the noble Viscount, Lord Younger, disappointment that there are not hordes of colleagues here wanting to question these regulations. They are extremely important and utterly fascinating, but there is no accounting for taste—what can we say? I am very grateful to him and to my noble friend Lord Davies of Brixton for being here, asking such excellent questions and keeping me on my toes. I am going to try to work my way through them.
It is worth saying at the outset that my noble friend Lord Davies had quite a nice analogy about moving into a house. I moved house a year ago, and he is absolutely right—I now realise there should be power points in the middle of my kitchen where I actually use my devices and none of them are there. However, the reality is that there have to be some power points; some decisions have to be taken. At some point down the line, I may decide on additional power points and just have them put in. There may be new lights in the house, but we have to start off with lights, and we may add more lights later.
We have gone to considerable care to make sure that the system is set up as robustly as possible, but we will adapt and learn as we have experience from this. That is an important question, but it is one I am happy to offer reassurance on.
We think that CDCs are a type of money purchase because there is a type of money purchase benefits in the legislation. They are covered by the legislation applying to money purchase benefits and not DB benefits. I can see him shaking his head; I have failed to persuade him, but I will keep trying on subsequent questions.
My noble friend mentioned in passing that there are lots of different kinds of legislation and asked how they join up. I assure him they absolutely do join up. The Government have a vision for the pensions landscape. Most of these issues are coming in stages; for example, we have made our views known; we have had comments and clear steers from the Chancellor; we have had the pensions investment review, which set out the landscape, and as a result of that, we have the Pension Schemes Bill, which starts next week and which he and I are looking forward to so much. That will make the necessary adjustments to the landscape so that the Pensions Commission, which is doing its work on issues such as adequacy, can make sure that if savers, or indeed employers, are encouraged to invest more, or in different ways, the market is fit for it at that point.
These things do connect; I accept that they are complicated. One of the challenges is that pensions are very complicated, and there is a lot of money at stake, and therefore it matters—he raised the point about regulation—that we get that absolutely right.
My noble friend mentioned in passing the question about retirement CDCs. He will be aware the consultation has just closed and so more information on that will be coming out soon. He asked about whether CDC schemes will be captured by things such as the scale requirements in the Pension Schemes Bill. Because CDC schemes are a new and innovative development with the potential to offer improved outcomes, they will need to have a degree of scale and a long investment horizon to enable them to invest in a wider range of assets, including productive assets. It is right to give this new market the space to develop with confidence, but we are going to keep the requirements for these schemes under review as the market develops.
He asked about how the legislation will ensure fairness between members of different employers. Regulation 40 specifies that any adjustment to benefits that may need to be made must be applied to all members “without variation”. Regulation 40 also requires that benefit rates must be determined on the principle of actuarial equivalence and that, as he will of course be only too aware, is achieved when the expected accrual and expected contribution levels are equal over a period of time. That prevents new entrants unfairly subsidising existing members and avoids cross-subsidies between employers, which could, for example, happen if one employer had a younger workforce than another.
Both he and the noble Viscount, Lord Younger, asked about communication to members of CDC schemes. The regulations require schemes to inform members regularly and clearly that the rate or amount of benefits provided under the scheme is not guaranteed and can fluctuate. This includes providing this information at joining, annually and in retirement. CDC schemes are also required to have adequate systems and processes for communicating with members and must provide information in their authorisation application about monitoring them to help ensure the systems and processes remain effective. To ensure transparency, key scheme information must be made available on a publicly available website, including the scheme rules, a summary of the scheme design and information about the most recent actuarial evaluation of the scheme.
My noble friend commented about whether the regulation is all too burdensome or too hard to join, but as in DC schemes, members will bear all the risks of the CDC scheme in accumulation and decumulation. So, we think it is only right that we make sure these schemes are well-designed, well-run and resourced properly so that employers, members and the Pensions Regulator can have confidence in the scheme at authorisation and on an ongoing basis.
My noble friend raised the question of commercial interests. I know he was not necessarily challenging there being commercial providers; it was more about the language and how that is understood. We have worked quite hard to make sure that the authorisation criteria require a clear separation between the trustees and those funding the scheme, promoting the scheme and trying to make a profit out of it. The promotion and marketing authorisation criterion mitigates against the risk of overpromising to gain a competitive advantage, as I said in my opening speech. Although my noble friend does not like the term “proprietor”, the financial sustainability requirements are designed to prevent that person passing on to members the costs of setting up and operating the scheme.
Viscount Younger of Leckie (Con)
I thank the noble Baroness for spelling out the code of practice; we look forward to seeing that. I remain quite surprised that the Pensions Commission will finally report as late as spring 2027. I cannot believe it is going to take that long, despite the fact that pensions are generally known to be quite technical and detailed. I am not expecting the noble Baroness to comment on that, but I just wanted to put it on record. The noble Baroness did not answer my question about surpluses, and I am very happy to be written to about that. Perhaps the main question I wanted to ask, which the noble Baroness also did not answer, is about membership take-up at Royal Mail. What was the rate of take-up for the Royal Mail scheme?
Baroness Sherlock (Lab)
On the question of surpluses, the regulators will ensure that a scheme has sufficient financial resources through a range of key mechanisms centred around the role of a scheme proprietor, robust planning and ongoing regulatory oversight. The Pensions Regulator must be satisfied that the scheme is financially sustainable before it can be authorised. That would obviously involve a rigorous assessment of its expected costs, income and the strategy for recovering any shortfalls. The schemes accounts have to be submitted to the regulator on an ongoing basis to give transparency. I am not sure that that does answer his question on surpluses, but if I have an answer, I will write to him.
On the membership take-up of the Royal Mail scheme, 110,000 people have joined and around 700 have opted out. I hope that answers that question, and that I have answered all the other questions. I thank both noble Lords for their helpful contributions to this debate. This instrument will allow CDC schemes to play an integral role in the future of pensions in this country, affording potentially millions of savers access to the benefits they offer. With that, I commend this instrument to the Committee, and I beg to move.
Education (Scotland) Act 2025 (Consequential Provisions and Modifications) Order 2025
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I am grateful for the opportunity to debate this order today. As with all the Scotland Act orders we have considered since the start of this Parliament, this is the result of collaborative working between the UK and Scottish Governments. The order before us will be made under Section 104 of the Scotland Act, which, following an Act of the Scottish Parliament, provides the power for consequential provisions to be made to the law relating to reserved matters or the laws elsewhere in the UK. Scotland Act orders are a demonstration of devolution in action, and I am pleased to say the Scotland Office has taken through 10 orders in the past 12 months. This is a legacy of the historic devolution settlement, introduced by the last Labour Government, of which we are rightly proud.
Let me turn to the purpose and effect of this order. It is being brought forward to make provisions in consequence of the Education (Scotland) Act, which received Royal Assent earlier this year. This Act of the Scottish Parliament provides for the establishment of a new qualifications body—Qualifications Scotland—to replace the existing Scottish Qualifications Authority, or SQA. It also creates the office of His Majesty’s Chief Inspector of Education in Scotland, removing the inspection function from Education Scotland, which is an executive agency of the Scottish Government.
The UK Government have worked collaboratively with the Scottish Government on this draft order, which is needed for the commencement of some of the provisions of the Act. The draft order under consideration today is necessary to ensure that the functions currently exercised by the Scottish Qualifications Authority can be fully transferred to the new body being set up: Qualifications Scotland. This will ensure that Qualifications Scotland is able to deliver all of the services and products that are currently delivered by the SQA, maintaining the same functional and geographical scope.
The order also makes a number of consequential amendments in reserved areas—and to UK, Welsh and NI regulations—to reflect the replacement of the SQA with Qualifications Scotland. These are needed so that existing provisions across numerous regulations can continue to operate in the same way as they do now.
Finally, this draft order is needed to designate the newly created office of His Majesty’s Chief Inspector of Education in Scotland as a non-ministerial officeholder in the Scottish Administration for the purposes of the Scotland Act 1998. This change is needed to ensure that the person appointed to the role is a civil servant; this is required to support the delivery model for the inspectorate being set up by the Education (Scotland) Act.
This order is about making limited changes to the law only so far as is necessary to give full effect to the provisions of the education Act of the Scottish Parliament. Although the order’s provisions extend to the whole of the UK, its practical effect is limited to Scotland. Without this order, there is a risk of disrupting both the education system in Scotland and the hard work of teachers and young people across Scotland. This order is an example of devolution in action; it is about the UK Government working with the Scottish Government to deliver for the people of Scotland. In that spirit, I commend it to the Committee and beg to move.
Lord Bruce of Bennachie (LD)
My Lords, I thank the Minister for introducing this measure. It is not a controversial measure in itself, but I probably need to declare an interest as all five of my children have been through the Scottish educational system—the older two, at a time when it was the admiration of the world. The latter three did all right but, I have to say, they were in the system at a time when Scottish education was not performing to its previous high standard.
The consequence of that was the legislation that is this order’s precursor—namely, on the abolition of the SQA, which was deemed pretty unfit for purpose. One of the things that did for it in the end was Covid. Children in school—I speak of my own—were in a situation where even the teachers did not know what they were preparing them for in terms of examination. In the end, awards were given without any examinations having been taken on a “here you go” basis; that was not at all satisfactory and raised questions, which have probably gone by, around whether the qualifications the children got were as valid as they might have been. It was a very unfortunate situation.
Going back, before that there was the establishment of the curriculum for excellence in Scotland. I genuinely believe that it was introduced for the best of reasons but, over a number of years, it became clear that it simply was not working effectively. I never quite understood the Scottish Government’s problem with the curriculum for excellence. It was established not by them but by the previous Scottish Government, yet they did not seem to be willing to accept the fact that something was not working and needed to change. They felt that that would somehow be an admission of failure on their part, as opposed to what it should have been: leadership.
I have to talk about anecdotal evidence. There were concerns about the way the curriculum was influenced by political undertones. What I would call nationalistic elements were introduced into the curriculum, with some subjects taught selectively to promote Scottish otherness rather than the UK dimension or Scotland’s role within it. That caused some concern and I know that some teachers, because they were allowed to do so under the curriculum for excellence, made their own interpretations and gave children the benefit of a broader assessment.
The Earl of Effingham (Con)
My Lords, I thank noble Lords who have made valuable contributions to this debate. With all due respect, it is of great concern that the Scottish National Party has allowed educational standards to slip for way too long, thereby damaging the prospects of a generation of young Scots. The aim of His Majesty’s loyal Opposition is to do everything we can to reverse this downtrend. While this reform might be a step in the right direction towards a common goal of better education for Scotland, many questions need answering.
The previous Conservative Government understood that, to achieve educational excellence, a country needs a goal-oriented and data-driven plan. From our first day in office, we reorganised authorities and implemented new measures that reflected this belief. In doing so, we demonstrated exactly what is possible and can be achieved with a Conservative outlook on education. From when we took office until the last PISA assessment in 2022, England jumped from 27th to 11th in the world in mathematics and from 25th to 13th in reading, in addition to improvements in science. It is deeply regrettable that this was not replicated in our devolved nations. Nowhere is this more evident than in Scotland, where educational standards have continued to slip across the board, more so than anywhere else in the UK.
Scottish children now sit 32nd in the world in mathematics and science; worse, the unnecessary decline has hit hardest those who desperately want a better education. Since 2015, the Scottish National Party has said that closing the attainment gap is its priority. Why, then, have we seen the opposite: an increase in the gap between the proportion of school leavers from the most and the least deprived areas who have one pass or more in National 5s, which now sits at 22.7%? At the Highers level, that gap now sits at 38.4%—an increase from 36.9% in 2023. This appears to be a postcode lottery, which is totally unfair by anyone’s reckoning.
A key element of this detrimental outcome is driven by a qualifications body that does not achieve the purpose it exists to serve. The Scottish Qualifications Authority has been described as misaligned with the wider school curriculum. Schools aim for breadth but are forced to narrow their scope due to an increased focus on exams in later years. Unfortunately, the SQA has lost the confidence of teachers—this was confirmed by Andrea Bradley, who heads Scotland’s largest teaching union, the EIS, and who welcomed the introduction of a new qualification service—as well as that of parents and children. As was highlighted so well by the noble Lord, Lord Bruce of Bennachie, in 2020, the SQA overlooked the professional judgment of teachers, issuing grades to 125,000 students through an algorithm. The result was that young people from the most deprived backgrounds had their grades downgraded.
It is crystal-clear that change is needed. A qualifications board that has the trust of neither teachers, parents nor students is not fit for purpose; that is why the announcement of a new qualifications body seems welcome. Looking past the announcement, though, it appears to be the same engine under a slightly different bonnet. In fact, I am particularly pleased to confirm to your Lordships that I am not able to put it better than the Scottish Labour Party, which is rightly on the record as saying that this is nothing more than a “superficial rebrand”.
The primary issue with the SQA was that it both awarded and accredited qualifications. Its remit was to issue qualifications and, at the same time, to set the standards to which those qualifications would have to adhere. It was self-referential and accountable to no one but itself. Its success was judged on how well it wanted itself to do. Various education experts have surmised that it had become its own policeman; it was marking its own homework. I am sure that noble Lords would agree that that is no way to run a qualifications authority.
It appears that the SNP has now brought forward the same failed strategy with the new Qualifications Scotland—another body that fulfils the same awarding and accreditation functions. No one wishes to see a repeat of the 2020 fiasco. Why should parents, students and teachers believe that this new body will have their best interests at heart? It is of course challenging for any noble Lord to answer for the SNP’s failings, and it serves no purpose to regret this Motion formally, but devolved Governments must take responsibility for educating children seriously. They cannot simply rebrand failing organisations, cross their fingers and hope that the outcome will be different a second time around.
His Majesty’s loyal Opposition are sceptical of this change. We wholeheartedly agree with our colleagues in the Scottish Conservative Party and other education experts that the SQA’s functions should have been separated. However, if that is not going to happen, our mission must be to have a relentless focus on bettering education for Scottish children through whatever means possible; we will retain a laser focus on that.
Lord Katz (Lab)
My Lords, I thank the noble Lord, Lord Bruce of Bennachie, and the noble Earl, Lord Effingham, for their contributions to the debate; it is a distinct pleasure to respond to my fellow Whip across the divide. Both noble Lords focused not so much on the order but on its impact on the education of children in Scotland. Let me take a moment to say that we can all agree that the record of the SNP Government in Scotland on educational attainment levels is appalling.
The noble Earl, Lord Effingham, said that Anas Sarwar, the Scottish Labour leader in the Scottish Parliament, described the creation of Education Scotland as nothing more than a “superficial rebrand”. Earlier in the year, he went further in his critique of the whole of the SNP’s failure on education, saying that it was the “defining failure” of the Scottish Government under the Scottish National Party. All of us in this Room might agree with that; indeed, with many young Scots leaving full-time education today without a single Higher or equivalent qualification to their name, it is certainly not a record to be proud of.
I regret the fact that there are no SNP Peers available here to defend their Government’s record in Holyrood when it comes to education or any of the other public services that they deliver—or, mostly, fail to deliver adequately. They simply do not know what they are missing here but perhaps they are, as they might say, a little frit. However, we are here not to scrutinise the failures of the education system under the SNP but to discuss the order being brought forward at the request of the Scottish Government, on which the UK Government, the Scotland Office and the Scottish Government have worked closely together as per the normal practice of the devolution settlement.
It is clear that, as we have already discussed, this order is necessary to implement the Scottish Parliament’s Education (Scotland) Act 2025. It is important for the whole of the UK because Scottish qualifications, whether under the SQA or Education Scotland, are taken by people in other parts of the UK—that is, in England, Scotland and Northern Ireland. It is important that we align our regulations properly so that there is continuity for everybody in the UK taking qualifications offered and examined by what will be Qualifications Scotland, whose functions will become fully operational in early 2026. As I said, the order will also enable His Majesty’s Chief Inspector of Education in Scotland to be fully operational as an officeholder in the Scottish Administration, which is also planned for early 2026. Scottish Ministers simply cannot commence certain provisions in the 2025 Act until this order is made.
In closing, this instrument demonstrates the continued commitment of the UK Government to work with the Scottish Government to deliver for Scotland. As we have had a slightly critical discussion of the state of education in Scotland, I should add that, of course, voters in Scotland will have an opportunity next May to run the rule over the Scottish National Party’s record in office when it comes to education and much else. For my part, I am sure that they will find the report card wanting and will want to replace the teacher with Anas Sarwar and his Administration; I am also sure that others will have other views. With that, I commend this order to the Committee.
Infrastructure (Wales) Act 2024 (Consequential Amendments) Order 2025
(1 day, 6 hours ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Baroness Anderson of Stoke-on-Trent
That the Grand Committee do consider the Infrastructure (Wales) Act 2024 (Consequential Amendments) Order 2025.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, this order was laid before your Lordships’ House on 27 October 2025. The draft order is needed following the passage of the Senedd’s Infrastructure (Wales) Act 2024. The 2024 Act streamlines and unifies the decision-making processes for devolved infrastructure projects in Wales, including significant energy, waste, water and transport projects. It does this by creating a new consenting regime for these devolved projects, with a number of existing consents, authorisations and licences integrated into the new process. Previously, these devolved projects in Wales have been consented under various pieces of legislation, including the Electricity Act 1989 and the Transport and Works Act 1992. They will now require infrastructure consent under the Welsh Government’s 2024 Act.
The Welsh Government will commence the Infrastructure (Wales) Act 2024 and bring the new consenting process into force next week, on 15 December 2025. This draft order makes consequential amendments to UK legislation that falls outside the legislative competence of the Senedd. The amendments are necessary to ensure that the Act can take effect as intended and are therefore needed in advance of the new process coming into force. As the 2024 Act establishes a new consenting arrangement in Wales, it is not reflected in UK legislation in the same way that existing processes are. This order updates the relevant UK Acts to take account of the establishment of infrastructure consent in Wales by ensuring that it is treated in a way that is consistent with those existing consenting arrangements.
First, this order amends the Nuclear Installations Act 1965. Under the 1965 Act, applicants for a nuclear site licence may be directed to notify relevant public authorities about their application. This power of direction, however, does not apply to applications for nuclear generating stations, which require consent under the Electricity Act 1989. This is because the 1989 Act sets out its own requirements for consultation with public authorities. In line with this, Article 2 of this order ensures that the power of direction in the Nuclear Installations Act 1965 does not apply to projects which require infrastructure consent under the Infrastructure (Wales) Act 2024. This is because the 2024 Act similarly places its own requirements on applicants to consult with public authorities.
Secondly, this order amends the Planning (Hazardous Substances) Act 1990. When granting infrastructure consent under the 2024 Act in circumstances where hazardous substances consent would also be required, the Welsh Ministers can deem hazardous substances consent to be granted. This enables hazardous substances consent to be granted without a separate application being needed. Article 3 of this order amends the 1990 Act to create a requirement for the Health and Safety Executive to be consulted before hazardous substances consent can be deemed to be granted by the Welsh Ministers as part of an application for infrastructure consent. This ensures that the HSE can consider the risks that the hazardous substance may present to people nearby and provide science-based advice to the Welsh Ministers. This replicates the process for other consenting regimes, including under the Electricity Act 1989, which require consultation with the Health and Safety Executive in these circumstances.
This order amends Section 130 of the Finance Act 2013, which relates to the annual tax on enveloped dwellings. This tax is payable on properties that are within the UK, classed as a dwelling and owned fully or partly by a company or a collective investment scheme. Where a building is being converted for non-residential use and the conversion requires infrastructure consent under the new Welsh processes, Article 4 of this order ensures that the building will be classed as a dwelling for the purposes of the tax until consent required for the modifications is granted. This is in line with the process for conversions to buildings which require planning permission or development consent under the Planning Act 2008.
I welcome the Welsh Government’s infrastructure Act and the new streamlined consenting arrangements for devolved infrastructure in Wales. This draft order makes the necessary consequential amendments to reserved legislation, helping to ensure that the Welsh Government’s Act can take effect as intended. I beg to move.
Baroness Humphreys (LD)
My Lords, I welcome this statutory instrument, which provides the necessary consequential amendments following the enactment of the Infrastructure (Wales) Act 2024. It represents a sensible and measured step to ensure that the new Welsh infrastructure consent system is aligned with existing legislation across the United Kingdom. While this order is by its nature technical, it none the less reflects an important moment in the ongoing evolution of Wales’s governance arrangements. I therefore ask the Minister whether she views this legislation as an expression of confidence in Wales’s ability to manage and deliver major infrastructure projects and, more broadly, whether she considers it indicative of a direction of travel towards further devolution.
The Minister will know, as many of us do, that there is growing concern in Wales that the party which proudly introduced devolution in 1999 now appears resistant even to discussions about extending those powers or devolving additional services. In the last year alone, Members of both Houses have made the case for the devolution of policing, justice, youth justice and the Crown Estate, all to no avail. However, this order shows that effective co-operation between the Welsh and UK Governments is possible and productive. Can the Minister clarify whether she sees this as part of a broader commitment to strengthen that partnership and recognise Wales’s capacity to take greater responsibility for its own affairs?
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank the Minister for introducing this order to the Committee. The order makes minor and technical changes to UK legislation, recognising the provisions in the Infrastructure (Wales) Act 2024. That Act, passed by the Senedd in June 2024, simplified the consenting process for infrastructure projects in Wales. As the Minister outlined, energy, electricity, transport, water and waste projects can now proceed through a single approvals process monitored and applied by the Welsh Government. The effect of this order is to ensure that existing UK legislation aligns with the Act. This includes amendments to the Nuclear Installations Act 1965, the Planning (Hazardous Substances) Act 1990 and the Finance Act 2013. These changes are largely consequential, but they are necessary to make the provisions of the 2024 Act fully operational.
While we accept the technical purpose of this instrument, a number of questions arise. I am very happy to receive any answers in writing if necessary. First, are the agencies in Wales sufficiently resourced to handle the additional applications and responsibilities arising from these powers? Secondly, while the processes are broadly similar to current UK procedures, how will the Government ensure that assessments in Wales meet the same standards and rigour as those elsewhere in the UK? Thirdly, what types of projects are most likely to be affected by this new consenting regime over the next five years? I note the impact on the Nuclear Installations Act 1965, as the Minister would expect me to. Finally, do the Government anticipate this instrument acting as a gateway to further devolution of infrastructure powers to Wales? If so, how will safeguards be maintained to protect the public interest and ensure safety in vital sectors?
Third-party commentators have welcomed the aim of simplifying infrastructure approvals. It is hoped that this will encourage sustainable investment and support Wales in reaching its net-zero targets. That said, clarity and consistency in guidance will be essential if investors, the public and decision-makers are to have confidence in the new regime. Subject to the Minister’s assurances on the questions I have raised, we recognise the technical and consequential purpose of this order and support it.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I thank both noble Baronesses for their valuable, if a little cheeky, contributions to the debate this afternoon. This order provides for a number of consequential changes to UK law and is necessary ahead of the Infrastructure (Wales) Act coming into force this month. I will touch on some of the points made; I may have to write to the noble Baroness, Lady Bloomfield, but I will make sure that both noble Baronesses receive the correspondence.
On the point made by the noble Baroness, Lady Humphreys, I believe that this order demonstrates that we have genuine confidence in the Welsh Government’s ability to undertake infrastructure projects.
Touching on a related point made by the noble Baroness, Lady Bloomfield, concerning the resourcing of agencies, obviously, that will be a matter for the Welsh Government, but they have received a record-breaking budget response in the SR and have promises in the SR going forward, so they should be fully resourced. As this area is devolved, it will be a matter for them.
On more devolution, the Labour Party’s manifesto at the last general election was clear about the areas in which we were working with our partners in Wales to explore and discuss options for further devolution. What we are seeing today with this SI is genuine devolution in action, with two Governments—one in Westminster and one in Cardiff—working hand in hand to deliver for the people of Wales. I hope and expect that still to be the case after May next year when the good people of Wales continue to vote Labour.
On the point about standards being maintained, we will expect standards to be maintained, of course. I am so pleased to be opposite the noble Baroness, Lady Bloomfield, when we can talk about Wylfa; I was delighted by all her questions in the run-up because she will probably be as excited as many of our colleagues to see the development announced with £2.5 billion of investment and a genuine supply chain that will lead to a generation of jobs in north Wales and beyond.
I will reflect on the other comments made by the noble Baronesses. I close by offering my thanks for the productive manner in which the UK and Welsh Governments have worked together in preparing this order.
Judicial Appointments Commission (Amendment) Regulations 2025
(1 day, 6 hours ago)
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Baroness Levitt
That the Grand Committee do consider the Judicial Appointments Commission (Amendment) Regulations 2025.
The Parliamentary Under-Secretary of State, Ministry of Justice (Baroness Levitt) (Lab)
My Lords, this amends the Judicial Appointments Commission Regulations 2013, which govern the composition of and eligibility criteria for the board of commissioners of the Judicial Appointments Commission, to which I shall refer as the JAC for brevity.
As your Lordships will be aware, the JAC is the independent body established under the Constitutional Reform Act 2005 to select candidates for judicial office in England and Wales, and for some tribunals with UK-wide powers. It is governed by an independent board of commissioners, appointed by His Majesty the King, on the recommendation of the Lord Chancellor.
One of the board of commissioners’ primary objectives is to ensure that the JAC fulfils its statutory responsibilities and obligations. These include ensuring that judicial appointments are made solely on merit through fair and open competition and having regard to diversity and good character. Commissioners oversee the selection processes, review recruitment strategies and make final selection recommendations to the appointing authority.
The current regulations set out the structure of the JAC’s board, specifying that there should be 15 commissioners, including a lay—i.e. non-judicial—chair. Of the other 14, seven must be judicial officeholder members, five must be lay members and two must be professional members—that is, people practising or employed as lawyers.
One of the purposes of these regulations is to expand the number of professional members from two to three, which will then expand the overall number of commissioners. Each of the professional commissioners must come from one of the three categories of legal professional; they must be either a barrister or a solicitor or a fellow of CILEX, which is the Chartered Institute of Legal Executives. At the moment, there is a barrister commissioner and a solicitor commissioner, but there is no CILEX commissioner. Apart from the three senior judicial members, the other 12 commissioners are recruited and appointed through open competition.
The regulations are being updated to strengthen the JAC’s capacity and ensure its continued effectiveness in judicial recruitment in two ways. First, the total number of JAC commissioners will be increased from 15 to 16, which is needed because of the anticipated increase in the volume of work. This will be done by increasing the number of professional commissioners from two to three. The requirement that they be from different professions will remain, so the effect will be that all three main legal professions—barrister, solicitor and CILEX fellow—are represented simultaneously on the board.
The reason this matters is that CILEX membership is generally more diverse than the other legal professions. Some 78% of CILEX fellows are women, and because CILEX provides a non-graduate route to become a lawyer, its members tend to be from more varied socioeconomic backgrounds. This amendment will support the JAC in its duty to promote diversity in judicial appointments by providing for a commissioner to lead on outreach in this field.
Secondly, there is, at present, an anomaly in the eligibility criteria for the senior tribunal commissioner role. These regulations will expand the eligibility criteria by including a wider range of senior salaried tribunal officers. Currently, only Upper Tribunal judges, chamber presidents of the First-tier Tribunal, chamber presidents of the Upper Tribunal and presidents of employment tribunals for England, Wales and Scotland are eligible.
The effect is that it is not open to all senior salaried members within the unified tribunal structure. In order to remedy this, the amendment expands eligibility to include all salaried members of the Upper Tribunal, certain judges of the Employment Appeal Tribunal, deputy chamber presidents of the First-tier Tribunal and deputy chamber presidents of the Upper Tribunal. This ensures equality of opportunity for those holding broadly equivalent roles, and it is a change that has been requested by the Senior President of Tribunals.
The extent of this instrument is UK-wide, and the territorial application of this instrument is UK-wide. The Lady Chief Justice and the JAC chair on behalf of the board, the Bar Council, the Law Society, CILEX, the Legal Services Board, the Senior President of Tribunals, the Lady Chief Justice of Northern Ireland and the Lord President of Scotland have all been consulted and are all supportive of these changes.
As far as public consultation is concerned, although there was a public consultation exercise for the 2013 regulations, it has not been considered necessary to conduct a further such exercise for these amendments given their limited effect. The amendments are necessary to strengthen the JAC’s capacity, provide greater equality of opportunity for those applying to be commissioners and support the JAC’s commitment to encouraging judicial diversity. I beg to move.
Lord Kirkhope of Harrogate (Con)
My Lords, I hope not to detain the Committee for very long. I declare my interest as a solicitor of the senior courts of England and Wales—a professional qualification that fills me with considerable pride even now, after many years of practice. In mixed company, where no one is aware of my political or administrative responsibilities over the years, I always indicate my function, when I am asked, as being a lawyer, not a politician, because that is the priority I place on that profession.
In no way do I wish to criticise these arrangements—indeed, I think that they are very sensible—but I want to point out a little of the history here and a bit about what I think may be a misunderstanding in the composition, particularly in relation to the three professional members that we will be discussing. Before the 19th century in this country, the provision of legal services was an amorphous, muddled arrangement that caused considerable difficulties; I will not refer to Shakespeare’s view on lawyers because plenty of people since Shakespeare have had a similarly negative view.
By the time we reached the 19th century, we had ended up with a clear division between barristers and solicitors. Although many countries went down that path and went on to merge those two sides of the legal profession into attorneys or some other single name, we retained that until the Legal Services Act 2007, so who a lawyer is has probably always been, in most people’s minds, a solicitor or a barrister.
We were then joined by legal executives: fellows of CILEX. I must pay tribute to the people who had previously been described as managing clerks, in terms of their functions in offices—they were people doing enormously important jobs—because all of my knowledge of property law was given to me by the managing clerk of the firm to which I was originally articled and in which I became an assistant. I pay massive tribute to their ability and knowledge.
Originally, though, however well-equipped they were, they were not lawyers. The 2007 Act came in and redefined “lawyers”—a word that is spread around. I know that my noble friend has talked about legal practitioners; again, they are slightly different from lawyers, in my opinion. We had lawyers being redefined in 2007 as solicitors, barristers, legal executives—fellows of CILEX—and licensed conveyancers. I have to say that the word has taken on a rather broad description, frankly. A lot of solicitors now have difficulty in dealing with licensed conveyancers whose licences appear to have been granted by bodies that most solicitors have never heard of. Trademark agents, patent agents and law costs draftsmen are lawyers under the Legal Services Act 2007.
Paragraph 5.2 of the Explanatory Memorandum states that commissioners should be
“persons practising or employed as lawyers”.
This Motion has been defined by the Minister as simply being moved so that fellows of the Institute of Legal Executives are eligible to be the third lawyer. However, if you then describe lawyers more broadly in this document without defining them in the context of, specifically, fellows of CILEX—or you do not include all those defined as lawyers under the Legal Services Act 2007—it is rather confusing because, if you say “lawyers” and maintain that description, there is no reason whatever why a law costs draftsman should not be appointed, thus maintaining the diversity that the Minister rightly suggests should be brought to bear in the commission. I think that that is confusing.
I know that these documents are mostly looked at only by other lawyers, as are the constitutions of the commission. But looked at from a public point of view, or if there is an argument or a discussion, clarification of this really is necessary. The Minister made it clear and I am perfectly happy with that, but it is wrong to generalise the term “lawyers” unless you define it within the terms of eligibility in that long list I have just given of people who are now claimed to be lawyers—much to my surprise, I have to say.
I am not looking at this narrowly; I am old-fashioned and have been around so long that, as I said at the start, I always thought that lawyers were either solicitors or barristers. I did not know about this longer list because of my ignorance in not actually having looked at the 2007 Act, which I have now read. I would be grateful if the Minister would reflect on that and perhaps make it clear—it has to be made clear somewhere—that merely being a lawyer, which is argued to be necessary in having the three representatives, is not broad at all but is actually confined to that one strand of lawyers under the 2007 definition, which is to be a fellow of the Chartered Institute of Legal Executives.
Lord Sandhurst (Con)
My Lords, I am grateful to the Minister for introducing these regulations. They make technical changes to the Judicial Appointments Commission. As explained, the number of commissioners will increase from 15 to 16 and a third professional commissioner will be added. This will mean, subject to the observations of my noble friend Lord Kirkhope, that a barrister, a solicitor and a fellow of the Chartered Institute of Legal Executives will be on the panel. The regulations also expand the list of offices from which the senior tribunal commissioner may be drawn. This ensures that holders of broadly equivalent judicial offices have equal opportunity to serve.
The Minister notes that these changes are intended to help the JAC manage a higher level of recruitment. The number of exercises and recommendations has grown in recent years, and the addition of a further commissioner should assist in meeting that workload. We accept that these regulations are largely technical, but remain concerned about the structure of the JAC. The current arrangements separate ultimate responsibility for judicial appointments from Ministers who are accountable to Parliament. This can weaken accountability, fracture responsibility and leave Ministers less directly answerable when appointments fail or standards fall short.
For that reason, the Conservatives continue to propose a judicial vetting committee within the Lord Chancellor’s office. Such a committee would be appointed by and accountable to the Lord Chancellor, ensuring that appointments are made on merit while restoring democratic accountability. In doing so, it would place ultimate responsibility for judicial appointments clearly with Ministers, who are answerable to Parliament and the public.
We would be grateful if the Minister could offer a few brief points of clarification. First, will the expanded eligibility of the senior tribunal commissioner affect the independence of the JAC or the balance of judicial representation? Secondly, is any further review of the JAC’s structure planned, particularly in light of proposals for a judicial vetting committee? Thirdly, will guidance be issued to ensure that adding commissioners does not create delays or extra burdens in the recruitment process?
Finally, I touch on the observations of my noble friend Lord Kirkhope of Harrogate. He acknowledged that these arrangements are sensible, but helpfully highlighted that the definition of a lawyer has been expanded over recent years to include a much wider range—not simply barristers, solicitors and, more recently, legal executives, but licensed conveyancers, patent agents and others. He suggests that the term “lawyer” is looked at carefully if it is to mean eligibility for judicial appointments, because it needs clarification if it is not to extend to a wider range than those in the three premier categories—if I can call them that—of barristers, solicitors and legal executives. Having said that, and subject to the assurances which I have sought, we on this side recognise the technical purposes of these regulations and are content not to oppose them.
Baroness Levitt (Lab)
My Lords, I am very grateful to both noble Lords for their contributions. The noble Lord, Lord Kirkhope, declared an interest as a solicitor. The noble Lord, Lord Sandhurst, and I should declare our interests as barristers in that case. I am not sure that it is an interest; it is more an interesting fact that everybody should know about. I am very grateful to the noble Lord, Lord Kirkhope, for his interesting historical trip down memory lane about how lawyers used to be categorised. I am old enough to remember when there was talk of giving members of his profession rights of audience in the upper courts. There was the most terrible outcry from our branch of the profession—one that most of us would now think was misguided.
I utterly understand that the noble Lord is not making any criticism of CILEX fellows or suggesting that there is any hierarchy of desirability of lawyers but merely making the point that the drafting is perhaps not clear enough. Has the noble Lord looked at the Explanatory Note? That makes it clear that there will be three commissioners
“who are persons practising or employed as lawyers”,
one of whom must be a barrister in England and Wales, one a solicitor of the senior courts of England and Wales and one a fellow of the Chartered Institute of Legal Executives. The Explanatory Note, taken together with the regulations, makes it clear that there are only three categories of lawyer. The concern that the noble Lord raised about it not being clear enough has not been raised by any of the consultees. I hope that the Explanatory Note is sufficient to allay his concerns. If not, he can write to me, and we will consider the matter further, but certainly for my purposes I am content that it makes the position entirely clear.
Turning to the concerns of the noble Lord, Lord Sandhurst, about the structure of the Judicial Appointments Commission and His Majesty’s Opposition’s proposal for a judicial vetting committee sitting within the Ministry of Justice, were any such body to be created, the very first accusation would be of political interference in the judicial appointments process. It would be difficult to avoid that perception, even if it was not correct, if politicians were ultimately deciding who should be appointed and who should not. I am not suggesting for a moment that the noble Lord, Lord Sandhurst, is older than I am. I am sure that he is younger than me—he looks younger than me and possibly feels it. However, even I am old enough to remember when judges were appointed by the touch on the shoulder. The reason the Judicial Appointments Commission exists is to have as much transparency in the process as it is possible to obtain. For that reason, this Government have no proposals and no plans to introduce a body within the Ministry of Justice such as he suggests.
He raised three other points. First, on expanding eligibility, the answer to that is no. Secondly, on whether there is a further review, the answer is also no. Thirdly, on whether it will create extra delays, the raising of the number of commissioners is designed to speed up the process. We are trying to do this anticipating the increase that is going to come. The noble Lord’s further point echoed the point made by the noble Lord, Lord Kirkhope. I hope that I have answered that.
I thank both noble Lords for their constructive approach. These powers are an important tool to support diversity in the appointment of our judges and ensure that the JAC can deal with an increased volume of work.
Strategic Defence Review 2025
(1 day, 6 hours ago)
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Lord Wallace of Saltaire
To ask His Majesty’s Government what response they are making to the proposals for a ‘whole society’ approach to threats to national security, as set out in the 2025 Strategic Defence Review.
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
My Lords, the Government are committed to reviewing the recommendations outlined in the strategic defence review, which recognises the importance of a whole-of-society approach to strengthening our resilience and readiness against the threats we face. Defence is playing a key role within the Cabinet Office-led home defence programme, which is co-ordinating civil and military preparations against the most serious risks. Our approach includes strengthening our civilian and military links to deliver legislation, enhance critical national infrastructure protection, and develop our reserve and cadet forces.
Lord Wallace of Saltaire (LD)
Does the Minister agree that this is a very radical proposal? The SDR envisages the mobilisation of substantial numbers of volunteers at local level, under local leadership, in civilian rescue teams, with reserve firemen, special constables and a new home defence force. It also calls for a national conversation on security. Do the Government intend to begin a national conversation, and how will they start to mobilise the sort of people who are needed?
Lord Coaker (Lab)
The noble Lord is absolutely right: it is an important matter and a radical proposal, and it is to do with the new threats we face as a country. We cannot any longer simply carry on as we always have done, so the proposals in this strategic defence review are radical and serious, and we intend to deliver them. One way that we intend to do that is to start to talk to the population of this country about the need for us all to wake up to the threat we face. That will require many of the actions that the noble Lord pointed out, and we intend to come forward with proposals in due course.
Lord Stirrup (CB)
My Lords, recent surveys suggest that there is weak to no openness among Generation Z to engage with defence or security issues. Going further on what the Minister has just said about talking to people, does he agree that any whole-of-society approach to defence must, as a precursor, require the Ministry of Defence and the Armed Forces more widely to reconnect with societal attitudes in this country, particularly among young people? If he does agree, can he say in more detail how the Government intend to go about this?
Lord Coaker (Lab)
I agree very much with the noble and gallant Lord’s points. As he said, the reconnection between the military and the civilian population is crucial. The one positive thing I would say is that, just a few weeks ago, like many noble Lords, I was at the remembrance events, where up and down the country tens of thousands of young people were remembering the sacrifice made in the past. They were Scouts, Guides, cadets and Reserve Forces—all of those. That is not a solution to the problem, but it points the way forward. It is one thing we should celebrate, as well as looking at the challenges we still face. The noble and gallant Lord will also know that we look to extend and expand the reserve and cadet forces. That will take some doing, but we are determined to do it.
Lord Harper (Con)
An important feature of the strategic defence review will be the defence investment plan. Can the Minister update the House about whether that will be published, as it was intended to be, before the Christmas Recess, and how the national conversation is going on between the Ministry of Defence and His Majesty’s Treasury?
Lord Coaker (Lab)
The Secretary of State is working hard to finalise the defence investment plan by the end of the year. The discussions that we are having with the Treasury have been successful up to now and we will continue those. Importantly, as well as the point that he made about the Treasury, the noble Lord referred to the national conversation. It is crucial that, across government, whatever Government it is, we start that national conversation with the people of our country so that they recognise the threats that they face, not necessarily from traditional warfare but from “greyfare”, the threats to underwater cables, cyber attacks and all those sorts of things. We face a very real threat from that now, and the question is how we take that national conversation forward quickly and urgently.
Lord Robertson of Port Ellen (Lab)
My Lords, I first declare an interest as a senior counsellor with the Cohen Group. Does my noble friend agree that the importance of the strategic defence review, which needs to get through to the wider public, is that Britain is under attack, both at home and from abroad, and that the transformation of defence, which is what the strategic defence review is all about, is essential for the nation’s safety? In the light of the stunningly depressing national security review published by the Americans last Friday, even more needs to be done to warn our public about the risks that we now face, and which we might now have to face without the United States of America?
Lord Coaker (Lab)
I totally agree with the comments that my noble friend has made. I read the strategic defence review again over the weekend in preparing for the Question, so I know that it is chapter 6. The important part was the challenge that it makes—not only to the public but to us as politicians and to Parliament—to reflect on how we engage. Too often, when we talk about national conversations, we talk about having a village hall meeting here or a village hall meeting there. That is not sufficient. This requires a whole-government approach, involving all government departments, the devolved Governments, local authorities, civil society, financial society and industry. All those together need to wake up to the very real threat. As my noble friend says, we are facing a threat now, not in a year’s time or five years’ time. That threat is upon us, and we need to wake up to it.
Baroness Goldie (Con)
My Lords, I echo what the Minister has been saying: the threat that we are facing is immediate. Other countries, recognising that urgency, have taken steps to engage their public through a range of measures, from conscription at one end to seeking volunteers aged 18 and over for military training—as in France and Germany—at the other end. I think what this Chamber wants to know is what imminent steps will the Government take to educate the British public now about the gravity of the situation and to put the UK on to a comparable readiness footing to these other countries.
Lord Coaker (Lab)
In saying that we need to do more and to act more urgently, there are already steps that have started to be taken across government. We are already looking at how we extend and develop the reserve and cadet forces, which are important. We are already looking at how we celebrate the involvement of young people at remembrance events, as I just said. We are also having seminars and conferences with industry and with finance—I am going to an event on Thursday night with veterans and the City of London. All sorts of different events are taking place that seek to address the very real and important issues that the noble Baroness has raised. The real challenge for the Government is how we do that more quickly and more urgently, but it is certainly one that they have addressed and have taken on board. It is a whole-government response; it is not just the government response now—although the Government have to lead it, of course—but how we all come together to address that very real challenge that we face.
Lord Houghton of Richmond (CB)
More fundamentally, does the Minister agree that the real resilience of a nation does not rest on the state of its physical infrastructure, or military numbers, or the number of boy scouts or reserves that we have, but, rather, it rests on its moral fibre and its societal integrity? The Minister does not explain or tell the House what the delivery pathways are that will enhance the human dimension of national resilience, for they are sorely needed.
Lord Coaker (Lab)
It is an important challenge and an important question put by the noble and gallant Lord. The starting point is to speak up and speak out, in a way that sometimes does not happen. For example, there is very real resilience among the population in many respects, but we need to explain to people, through government, devolved Governments and local government, the very real threats and challenges that they face now. The point that members of the public, more generally, need to understand is that it is not the traditional warfare, necessarily, that is the threat we are currently facing but the cyber attacks that we have already seen many examples of in our country, the threats to underwater cables and the threat to data. Indeed, it is why the carrier strike group was in the Indo-Pacific recently, protecting the trade routes on which this country’s economy and prosperity also depend. We need to do more on that, because, as the noble and gallant Lord says, building resilience among the population is something that needs to be done. I have confidence in the British people that if that is explained to them, they will stand up for it.
Lord Harris of Haringey (Lab)
My Lords, I refer to my interests as chair of the National Preparedness Commission. The Minister is saying all the right things; he is talking about how urgent it is, how it must be the whole of society and the whole of government, but he did not answer the question put at the beginning by the noble Lord, Lord Wallace, on when this national conversation is going to start. Could he give us a clearer indication of the Government’s timescale on that, and an indication, for example, of when the defence readiness bill—proposed in the security review—is going to come forward, and whether it will include a wider definition so that it looks at all the hazards we face, including climate change, criminal cyber gangs as well as hazards from overseas states?
Lord Coaker (Lab)
I am sure that when it comes forward, a defence readiness bill will include many of the things that my noble friend has pointed to. Defence in that sense, as he says, is more than just military equipment and troops; it is about climate change and many of the other things that he mentioned. The conversation has already started. We have started having conferences and conversations with different parts of industry. What I am saying to the Chamber, to my noble friend and to all those who spend so much time working on this, as I know he does, is that we need to accelerate and expand that, and to do that more than we are doing at present. A conference here and a conference there, while worth while and important, are not at the level of the sort of national conversation that needs to take place regarding our country. That is the point that I am trying to make. We have an Armed Forces Bill next year, but we are exploring defence readiness legislation—we look forward to seeing whether we can deliver that in this Parliament.
Employee Car Ownership Schemes
(1 day, 6 hours ago)
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Lord Woodley
To ask His Majesty’s Government what assessment they have made of the potential impact on the economy of changes to Employee Car Ownership Schemes announced on 21 July.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, at the Budget 2025 the Government announced that, to allow more time for the automotive sector to prepare for and adapt to the proposed changes in treatment for employee car ownership schemes, its implementation will be delayed until 6 April 2030, with transitional arrangements until April 2032. The tax impact and information notice have been updated to reflect the impact of these changes.
Lord Woodley (Lab)
My Lords, I welcome the Minister to the Dispatch Box, as I am sure all colleagues do. I thank him for his positive response, having listened to the motor industry’s concerns. However, while welcome, this delay to wiping out ECOS, a 40 year-old industry leasing scheme, begs the obvious question: what assessment was made when these proposals were mooted, given that they would reduce production by 100,000 vehicles a year, cost 5,000 automotive jobs and hardly put a penny extra into the Treasury’s coffers? Would the Minister agree to meet me and industry colleagues to discuss whether these proposals should be scrapped entirely?
Lord Stockwood (Lab)
I thank my noble friend for the question. The Government are firmly committed to their modern industrial strategy and to the automotive sector. We have listened carefully to these concerns, which is why we have delayed the proposed changes until 2030, with a transitional period to 2032. There has been an additional commitment of £2.5 billion for automotive investment into R&D, increased flexibilities around the ZEV mandate and the funded rollout of more charge points, and we have announced plans to cut electricity costs for energy-intensive industries. Further, this measure is not expected to add any significant overall macroeconomic impacts. However, after April 2030, it is expected to have some economic impact on businesses and employers that provide this scheme and afterwards sell on those vehicles to new market entry. This impact is predominantly concentrated on the motor manufacturer and motor dealerships industries. The Government are committed to their overall tax policy of fairness to fund and balance the public services.
Lord Harlech (Con)
My Lords, I declare an interest as an owner of a hybrid vehicle. The Minister will know from the recent Budget about the plan to tax EVs for road use per mile. Can he tell the House how this is going to work in practice?
Lord Stockwood (Lab)
As the owner of an EV, I have a vested interest in this. The taxation of motoring is a critical source of funding for public services and investment infrastructure, including the upkeep of our roads. Fuel excise duty is £24 billion to the national tax take, and it is important, as we transition to our climate change initiatives, that we balance this fairly so that everyone who uses the roads pays their equal share. Historically, motoring taxation has been structured around two elements: taxation on usage of the vehicle and taxation on the ownership of the vehicle. This transition means that all vehicles shall contribute fairly to the wear and tear of the roads, but drivers of petrol and diesel will pay fuel duty, whereas drivers of electric vehicles will not pay the current equivalent. I refer noble Lords to the Government’s policy on the specifics of how that shall be taxed and taken.
Lord Watts (Lab)
Mr Lords, this is a difficult time for the British car industry and it is a welcome announcement that this matter has been put off for some time. Will the Government continue to monitor car production problems in the car industry and review whether this policy should be implemented at the appropriate time?
Lord Stockwood (Lab)
I thank the noble Lord for the question. As I stated previously, as part of our modern industrial strategy we are committed to the automotive sector. Our ability to defer the start date for this particular policy shows that we are in open dialogue. We will continue with that dialogue.
Baroness Kramer (LD)
My Lords, I recognise that there has been an element of contrivance in the usage of the present employee car ownership schemes which the Government are closing down, although the delay is welcome. Right now, so many businesses are under stress, as well as the automotive sector generally. Will the Government be providing some sort of road map for those who are not using this in a contrived way but have a legitimate practice to be able to find a new mechanism to enable them to keep their businesses going? For example, would he find the salary sacrifice scheme approach an acceptable one?
Lord Stockwood (Lab)
The Government are committed to fairness in our tax system, so we are open to all those conversations. At the moment, we have set out the policy we intend to commit to.
Lord Forsyth of Drumlean (Con)
My Lords, I appreciate that the Minister is new to his post, but would he have a word with his colleagues? The car industry in our country is being destroyed by this determination to prevent it manufacturing vehicles with internal combustion engines beyond a particular date. I know that the Government are keen to be in step with Europe, so will they follow Europe and extend that period? What we are doing is creating a market for cheap Chinese electric vehicles, at the expense of some of the best engines in the world, and there are many jobs associated with that.
Lord Stockwood (Lab)
I thank the noble Lord for recognising my novice status—I appreciate it. I am in constant conversation with my colleagues. The Government are firmly committed to the automotive sector and intend to make sure that we fulfil our commitments to the sector and to the Climate Change Committee.
Lord Wallace of Tankerness (LD)
My Lords, going back to the question of mileage taxation on electric vehicles, does the Minister acknowledge that, in many rural areas, where there is often precious little public transport, there is a greater need for people to have a car, and therefore it would be disproportionately burdensome on those who live there? Have the Government any thoughts about finding a way of rebating the tax for those who are obliged to use a car in rural areas?
Lord Stockwood (Lab)
We believe that the tax system that has been applied is fair and balanced, but we are happy to take those points under consideration.
Lord Sentamu (CB)
My Lords, I welcome the Minister to the Front Bench of His Majesty’s Government. The noble Lord from the Official Opposition asked a question about the taxation of cars. I understand taxation for electric cars—that is pretty straightforward—but he asked about hybrids, which use both petrol and electricity. How will that work? Is it going to be a double whammy of taxation? I too drive a hybrid vehicle.
Lord Stockwood (Lab)
I thank the noble and right reverend Lord for declaring his interest. I believe that hybrid vehicles are going to be taxed at half the rate, which is 1.5p a mile, as opposed to 3p a mile.
Baroness Neville-Rolfe (Con)
I welcome the Minister to his first Question. He will be glad to know, returning to the original Question, that we agree that benefits in kind should be taxed at the appropriate level to avoid distortions. We also welcome the pragmatic delay in this new measure, to give individuals time to adjust. However, there are claims from the motor industry that there could be a substantial loss to the Exchequer, when job losses, lost VAT and excise duty are taken into account. With his new perspective, is the Minister confident that the Treasury has got its sums right on this?
Lord Stockwood (Lab)
Some three months into a new role, I am as confident as I can be about anything. The current projections are that it should not have a negative impact.
Lord Johnson of Lainston (Con)
My Lords, I welcome the Minister to his role. I seem to remember that being Investment Minister is an important part of government. One of our triumphs was that we succeeded in creating the new gigafactory for Tata, in Somerset, which was clearly a landmark event. What are the Government doing to build on that success?
Lord Stockwood (Lab)
I thank my predecessor, who did an excellent job in the Office for Investment. He will understand that we are looking at many different projects that enhance the investment attractiveness of the UK and at our commitment to our climate goals, in which the gigafactories are large and proportionate players.
Lord Hunt of Kings Heath (Lab)
My Lords, on the issue of climate goals, will the Minister remind the noble Lord, Lord Forsyth, that the CBI report in February 2025 showed that, since 2023, the net-zero economy had grown by 10.1%, which compares favourably with the general level of growth? Should we not celebrate the net-zero economy and the potential it brings to this country?
Lord Stockwood (Lab)
I thank my noble friend for the reminder. I agree that the net-zero transition creates the most attractive and best use of our capabilities in the UK. I am happy to support his comment.
Baroness McIntosh of Pickering (Con)
My Lords, given the distances in rural areas to charging points for those with electric cars, is it not a bit of an own goal to impose an upper mileage charge at this stage?
Lord Stockwood (Lab)
I thank the noble Baroness for her question. I do not believe that that is the case. We have a commitment to our climate goals, while balancing fairness in our tax take.
Young People not in Work, Education or Training
(1 day, 6 hours ago)
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Lord Hain
To ask His Majesty’s Government what action they are taking to reduce the level of young people not in work, education or training.
The Minister of State, Department for Education, and the Department for Work and Pensions (Baroness Smith of Malvern) (Lab)
My Lords, the Government are investing £820 million over the spending review to help young people earn or learn through the youth guarantee. This includes a job guarantee, in which every eligible 18 to 21 year-old who has been on universal credit and looking for work for 18 months will be guaranteed six months’ paid work. In addition, we have announced £725 million for the growth and skills levy to support apprenticeships for young people, alongside reforms to simplify the apprenticeship system and make it more efficient.
Lord Hain (Lab)
My Lords, I welcome what my noble friend the Minister has just explained, but does she agree that nearly 1 million people not being in work, education or training—rising remorselessly under the last Government—is terrible for them and for taxpayers? The longer people are out of work, the more costly it is to prepare them for work. The media and right-wing clamour for short-term cuts in welfare is for the birds, frankly. Labour’s hugely successful 1997 new deal for young people programme helped more than its targeted 250,000 young people to move off welfare into employment, costing £668 million or up to £8,000 per person. However, national income grew by at least £200 million annually—so, short-term costs for long-term savings. Surely, that should be our policy today?
Baroness Smith of Malvern (Lab)
I thank my noble friend for that question and also for his history of tackling this issue in past Labour Governments. I fully agree with him that having nearly 1 million young people not in work, education or training is not only bad for those young people but also very bad for the economy. That is why we have today announced further detail on the policy measures underpinning the youth guarantee, to which this Government have committed £820 million over the next three years. For young people on UC, we are introducing a new youth guarantee gateway session and follow-up support, which will be offered to nearly 900,000 16 to 24 year-olds in jobcentres over the next three years. We are expanding youth hubs to over 360 locations, creating around 300,000 opportunities for young people to gain workplace experience and training. We are also fully funding apprenticeship training costs for all eligible 16 to 24 year-olds, by removing the need for non-levy-paying employers to co-fund these learners; that is alongside the job placement for 18 to 21 year-olds that I have already talked about. That is the way we will turn around the scandal of nearly 1 million young people neither earning nor learning, with all the damage that creates for them and the economy.
Lord Baker of Dorking (Con)
My Lords, I thank the Minister for visiting two university technical colleges, where she saw colleges which had a NEET unemployment rate of under 2%, compared to the rate of a mainstream school of 13.6%, which is disgraceful and unacceptable. As no new colleges or schools will be built in the next five years, the only way that those in school in communities that have an industrial heritage will be able to study a practical, technical education is to have a sleeve of UTCs from 14 to 18. The Minister knows that we produce 25% apprentices and 50% STEM graduates. That is our contribution to ensuring that, by the time of the next election, youth unemployment will not exceed what it is today.
Baroness Smith of Malvern (Lab)
I always enjoy my visits to UTCs and of course my conversations with the noble Lord as well. UTCs are doing a very good job in providing technical education which then leads on to apprenticeships, and so are other schools as well. At the heart of our post-16 White Paper was that we provide the pathways, through the new V-levels, T-levels and apprenticeships, for young people to get the skills they need to make a success of their lives.
Lord Laming (CB)
My Lords, the Minister will agree that, after the 1948 Education Act was introduced, there was an unspoken contract between the state and parents that the state would provide education for every child and that parents, on the other hand, had an obligation to get their child to school every day, unless there was good reason for it not to happen. The difficulty about the young people not in education, work or training today is that this behaviour starts very early in a child’s career. Does the Minister have any thoughts about how we can restore the contract between the state and parents to get their children to school?
Baroness Smith of Malvern (Lab)
The noble Lord makes an important point. It is absolutely the case that children who are absent for periods of time, or who are in alternative provision by virtue of behavioural needs, are more likely not to be in education, employment or training. That is why, as part of this plan, we will have a particular focus on those children, to identify much earlier who is likely not to be able to find a college place or job, and to intervene at that point to prevent them becoming NEET in the first place.
Lord Palmer of Childs Hill (LD)
My Lords, I welcome the Minister’s comments, but this is very much a top-down approach to getting young people back into work. Can she give further assurance on how the Government will encourage tradespeople—the plumbers, electricians, brickies and others—to take on people as apprentices and trainees? This starts at the bottom. This does not start with all the courses that young people can do part-time; they have to be employed by a plumber, a builder or an electrician. What are the Government doing about it?
Baroness Smith of Malvern (Lab)
I am sure that the noble Lord will therefore welcome the announcement that we also made today of fully funding small and medium-sized businesses to take on apprentices. These are the businesses that are more likely to take on young people, including disadvantaged young people, and they are being supported by this Government. That will help to turn around the 40% decline in young people starting apprenticeships over the past 10 years.
Baroness Stedman-Scott (Con)
My Lords, does the Minister accept that the most effective way to reduce the number of young people who are NEET is to secure stronger economic growth, giving employers the confidence, incentive and capacity to hire? Furthermore, under Labour’s proposed new youth guarantee, which is very welcome, how will the Government ensure that young people are matched to sectors for which they are genuinely suited, so that employers are not left exasperated by placements that break down almost immediately due to poor alignment?
Baroness Smith of Malvern (Lab)
I am very glad to hear the noble Baroness’s recognition of the importance of the youth guarantee announcements that we have been making today. We also announced the first six areas in which we will work with intermediaries, and directly with employers, to find those placements. An important element of the job guarantee will be the additional support that we can place around young people, who, by virtue of having been unemployed for 18 months, will undoubtedly need that additional support, including identifying where their talents lie so that they can then be used to the max.
The Lord Bishop of Southwell and Nottingham
My Lords, care-experienced young people are particularly at risk of being not in work, education or training. Has the Minister taken note of the support that universities, such as Nottingham Trent University, provide to care leavers in admissions, finance and transition, while also securing affordable, suitable and stable accommodation for them and estranged young people? What assessment have His Majesty’s Government made of the additional support that care leavers need to stay in education? Can the Government ensure that this kind of specific support is available more consistently across universities and for apprenticeships too?
Baroness Smith of Malvern (Lab)
I hope I can reassure the right reverend Prelate about that. First, care-experienced young people are a key part of the group for whom universities have responsibility through their access and participation plans, and the right reverend Prelate identified some good examples of where universities are doing that. In addition, those young people receive additional bursaries to go to university in the first place. If they undertake an apprenticeship, the employer receives additional money to support them with that. On their interactions with the benefit system, employment and education, the Department for Work and Pensions provides additional support to ensure that these young people get the chances later in life that they have not necessarily had earlier on.
Royal Navy Submarine Force
(1 day, 6 hours ago)
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Lord West of Spithead
To ask His Majesty’s Government what measures they have implemented to resolve problems confronting the Royal Navy’s submarine force.
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
My Lords, the Royal Navy has successfully maintained Operation Relentless, the continuous at-sea deterrent, without interruption for over 56 years. We continue to adapt to new challenges to meet our submarine commitments, deploying globally on operations, protecting national interests and keeping us and our allies safe. Today, the First Sea Lord has announced further measures to protect the undersea environment to counter the new threats we face in that domain.
Lord West of Spithead (Lab)
My Lords, our submarine force is in a parlous state—the worst in my 60 years of service. Successive delays in ordering, a lack of dry dock investment, the failure to recruit and train the requisite nuclear personnel, training delays for those for those we have got, lack of spares and lack of maintenance have all taken their toll. Does our nation realise that, for the last year, this great maritime nation has had one attack submarine operational for most of the time? Some of the time, it has not had one at all. That is pretty horrifying for a maritime nation of our stature. These submarines are war winners. They frighten Putin and are what we use to give the Soviets a hard time with. That is where we have got to on that.
In terms of a continuous at-sea deterrent, at the moment, the boats are having to do 200-day patrols, with no fallback should something go wrong. We have maintained it—it is an amazing effort to do it—but, my God, we should not be in that position.
I think that the MoD does understand this and is beginning to pull things together and 1SL has a 100-day programme to sort it out. I ask my noble friend the Minister, because the nation needs to know how bad this is, can we go back to the Treasury and ask for extra money in-year, which can start an impetus to the 100-day programme of the First Sea Lord?
Lord Coaker (Lab)
I thank my noble friend for his Question. He will know that we have been to the Treasury and have secured more money for the defence programme and industry. Just to pick up on a point that my noble friend made, I think it is incumbent on us all to praise our submariners for the work they do and the time they spend at sea. We are seeking to address some of the challenges that my noble friend pointed out. He will know that there are now programmes of investment in the infrastructure of both Devonport and Faslane. He will know that the Dreadnought programme has a commitment of £31 billion, with a £10 billion contingency. He will know that we are seeking to invest in AUKUS, and we also have the Astute programme.
Alongside that, with respect to the problems that my noble friend pointed out with respect to the engineers and technicians who keep our submarines at sea, he will know that we have started to ensure that we recruit more of those. I am also pleased to announce to the House that the recruitment and retention submariners have improved as well. I accept the challenges that my noble friend lays out but, with the First Sea Lord and others, we seek to address that quickly and urgently, as the 100-day plan pointed out.
Lord Wallace of Saltaire (LD)
My Lords, could the Minister explain the maintenance problem, which clearly goes back a number of years? On the dry docks that are not ready, are private contractors are failing in their obligations or is there a shortage of money? What is now being done to rectify this enormous backlog of maintenance, which is a very large part of the problem?
Lord Coaker (Lab)
It is a challenge. Part of it is investment into the infrastructure. That can take a long time. One of the things that the Navy has looked to deal with that is the floating dry dock concept, which others could explain better than I can. It is certainly something that can be made available much more quickly than the investment into that, but there is significant investment going in Devonport and Faslane. That was something that I indicated in answer to my noble friend. We are also seeking, through the defence technical colleges that were announced as part of the growth deals and other ways, to ensure that we get engineers and technicians into these areas to work. That has been part of the problem.
If I might just digress slightly, I will say that getting technicians, engineers and the important skills that we need is a problem that has bedevilled our country for decades. We have always had a shortage of them, and successive Governments have tried hard to tackle that. Indeed, the noble Lord mentioned defence technical colleges, or whatever they are called, and they were one of the ways in which we tried to deal with that. Certainly, we need to do more to raise the esteem of vocational education to ensure that we get all the technicians and engineers that we need.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, it is the turn of the Cross Benches.
The Earl of Cork and Orrery (CB)
My Lords, could the Minister advise the House as to the progress of the floating dock construction to which he alluded just now? The programme was announced two years ago but has not yet shown any sign of going into production. Secondly, could he indicate whether there is any linkage between this and the Chancellor’s recent announcement of money to restore the Inchgreen dry dock in Port Glasgow?
Lord Coaker (Lab)
I do not know the answer to the second part of the question, so I shall have to write to the noble Earl about it. To answer the first part of his question, I know that the Ministry of Defence is looking carefully at the concept of floating dry docks. It is a much quicker way of ensuring that we have the capability that would otherwise be provided by the more traditional dry dock. It is certainly an important question that we need to look at it urgently.
Baroness Goldie (Con)
Senior representatives from BAE Systems and Babcock recently warned the Defence Select Committee in the other place of the risk to the AUKUS programme of delays in decision-making and alignment. What steps have the Government taken in the light of that evidence to avert these risks?
Lord Coaker (Lab)
With respect to the AUKUS programme, we have made sure that nobody is under any doubt about its importance and our determination to take it forward. There has always been a question about the commitment of the United States to it. Recently—I think it was in October—the President announced its commitment to the programme. The noble Baroness should wait until later in the week, when other things may be said. Let us be clear. The AUKUS programme is a phenomenal alliance between Australia, ourselves and the US, and one of the ways to ensure that it goes forward is for us to have the confidence that we can deliver it and to talk about how it will be delivered as well as some of the challenges it faces.
Lord Anderson of Swansea (Lab)
My Lords, do we have any concerns about the commitment of the US Administration to the AUKUS concept?
Lord Coaker (Lab)
The noble Lord, Lord Robertson, is now not in his place. I keep saying that the US and the UK are fundamental allies in the protection of global security in every part of the world. To answer my noble friend’s important question, I have no doubt that the US, the UK and Australia will stand together in the AUKUS programme. One way in which we will achieve that is by looking forward to the important steps that the US is taking to work with us. I think it was the Colby review there that looked into the AUKUS programme and found it was something that the US could take forward. As I have said, let us wait until later in the week, but the US-UK alliance is as strong as it ever has been and will continue to be so.
Baroness Wolf of Dulwich (CB)
My Lords, the Minister referred to and acknowledged the shortage of technicians. He also said that we need to raise the status of vocational education. I really do not think that is the problem. We have at least five people chasing every apprenticeship opening in this country. We have excess demand for engineering courses at universities, because they are not funded at a level which means that the number of places can be expanded. Could the Minister say whether his ministry is talking directly to the relevant other departments about how to increase capacity for technician training?
Lord Coaker (Lab)
It would be interesting to have a conversation outside the Chamber with the noble Baroness about her challenge to me. Certainly, we are talking to other departments about what more we can do to encourage technical education and I would like to discuss this with the noble Baroness. When I go to MoD establishment after MoD establishment, there are vacancies and they cannot recruit people into those bases to do some of the work they need to do. There is a particular problem and I would be very keen to talk to the noble Baroness about what we might do about it.
Lord Howell of Guildford (Con)
My Lords, is not the most immediate and serious threat to our national prosperity and security the safety of our entire subsea cable system, on which the nation depends daily and hourly? I do not think the Minister has mentioned subsea cables and how to cope with them, or the role of submarines in dealing with this. Can he assure us that, even if we do not have the submarines now, we are planning to build the vehicles—submarines and new technologies—to deal with this rather promptly, because the threat is coming soon?
Lord Coaker (Lab)
That is a really important question; I apologise if I have not mentioned undersea cables, because there is an important need and requirement for us as a country to protect them and the critical national infrastructure that flows under the sea. If the noble Lord has not had a chance yet, I suggest that he reads the First Sea Lord’s speech this morning at the International Sea Power Conference, where he talked about Atlantic Bastion, which seeks to deal with many of the points that the noble Lord has quite rightly just raised. These are new undersea technology vessels, for want of a better word, that can operate through the use of artificial intelligence and, as a result of that artificial intelligence, military personnel can make decisions about what they should do. They can stay under water for a considerable period of time and they liaise not only with ships but with aircraft and indeed submarines. That is the sort of thing that I was talking about in the earlier Question about the new warfare and new threats that we face, and the new equipment that we will need to deal with those threats. So, having these uncrewed vessels, alongside our submarines, our ships and our aircraft, as outlined in Atlantic Bastion earlier today, is certainly the way forward, and I hope that that reassures the noble Lord with respect to that threat that we face.
Liaison Committee
The Senior Deputy Speaker
That the Report from the Select Committee New committee activity in 2026 (5th Report, HL Paper 221) be agreed to.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, at the start of this year, the House appointed four special inquiry committees on: the Autism Act 2009, UK engagement with space, social mobility policy, and home-based working. All those committees have now published their reports, and I look forward to the reports receiving comprehensive government responses shortly. I express my sincere gratitude to all Members who contributed to those inquiries and indeed for all our committee work throughout the year. My thanks go also to the officials who have supported the work of your Lordships’ Select Committees this year.
I turn to the proposed special inquiry committees for the coming year. The Liaison Committee considered 41 suggestions from noble Lords, demonstrating the breadth of interest and expertise across your Lordships’ House. All these proposals have been published on the committee’s website. As ever, the Liaison Committee faced a difficult task. We assessed the proposals against our published criteria, which are that a committee:
“Makes best use of the knowledge and experience of Members … Complements the work of existing Select Committees, including Commons departmental select committees … Addresses areas of policy that cross departmental boundaries; and … be capable of being confined to 10 months”.
In addition, as set out in our invitation to Members to submit proposals, the committee took into account broader factors, such as
“the balance of topics across special inquiry committees (including in previous years), the work being conducted by other committees across both Houses, and within Government, and anticipated legislation in the subject area”.
The Liaison Committee decided to propose four special inquiry committees on: childhood vaccination rates, national resilience, numeracy, and the Domestic Abuse Act 2021. As is customary, the proposed committees include one post-legislative scrutiny topic and three general special inquiry topics. I trust noble Lords will agree that these recommendations span a diverse range of subjects, offering valuable opportunities to inform debate and influence policy, and indeed make excellent use of Members’ backgrounds and expertise. I beg to move.
Conduct Committee
Lord Kakkar
That the Report from the Select Committee The conduct of Lord Dannatt (7th Report, HL Paper 219) be agreed to.
Lord Kakkar (CB)
My Lords, there are two reports on today’s Order Paper and, while they are unconnected, in the interests of time I shall speak to both. The first report is on the conduct of the noble Lord, Lord Dannatt. This follows the publication of allegations in the Guardian newspaper in March, after which the noble Lord referred himself for investigation to the commissioner for standards.
The original allegations arose from conversations between the noble Lord, Lord Dannatt, and undercover journalists posing as potential clients. The commissioner judged that the noble Lord, Lord Dannatt, had expressed a clear willingness to provide paid parliamentary services to the journalists, thereby breaching the long-standing rule that noble Lords should act always on their personal honour. During the investigation, evidence emerged of three further cases in which the noble Lord had provided parliamentary services, such as facilitating meetings with officials or Ministers, in return for payment.
This is not the first time that cases involving the provision of parliamentary services have come before the House. I remind noble Lords that paragraph 17 of the current code states that Members must not
“accept or agree to accept payment or other incentive or reward in return for providing parliamentary advice or services”.
The noble Lord, Lord Dannatt, argued that he was acting in the national interest but, even if that were so, it provides no defence. The code is clear that accepting payment in return for offering parliamentary advice or services, which includes setting up meetings or introductions, or writing to Ministers or officials, is prohibited. This is so whatever the motivations of the Member. I urge all noble Lords to read the report and, if they have any questions, to contact the Registrar of Lords’ Interests, who is always happy to advise.
Given the number of breaches that came to light in his investigation, the commissioner concluded that a significant suspension was appropriate. I therefore invite the House to agree that the noble Lord, Lord Dannatt, be suspended for four months.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, under Standing Order 68, no debate is allowed on this Motion. I must therefore now put the Questions that the Motions in the name of the noble Lord, Lord Kakkar, be agreed to.
Lord Kakkar
That, in accordance with Standing Order 11, Lord Dannatt be suspended from the service of the House for a period of four months; and that, in accordance with section 1 of the House of Lords (Expulsion and Suspension) Act 2015, in the opinion of this House, the conduct giving rise to this resolution occurred after the coming into force of that Act.
Conduct Committee
Lord Kakkar
That the Report from the Select Committee The conduct of Lord Evans of Watford (8th Report, HL Paper 220) be agreed to.
Lord Kakkar (CB)
My Lords, I turn to the second report, which is on the conduct of the noble Lord, Lord Evans of Watford. He too was the subject of a sting operation; it was undertaken by journalists posing as potential clients of a company owned by the noble Lord’s son, in which the noble Lord held one-third of the shares. The noble Lord also referred himself for investigation to the commissioner for standards.
The noble Lord, Lord Evans, was recorded offering to provide parliamentary services to the journalists, thereby breaching the rule that noble Lords should act always on their personal honour. The case uncovered several additional breaches of the code. It emerged that the noble Lord had sponsored events in the House of Lords on behalf of the company and had approached other noble Lords to ask them to speak at these events. In so doing, he provided parliamentary services to a company in which he had a financial incentive.
Moreover, the events themselves breached the events rules. They were designed to generate income and drum up business for the company which the noble Lord, Lord Evans, partly owned, and tickets were advertised at a price higher than the actual cost. The rules on events are clear. The facilities of the House are provided at public expense to support Members’ parliamentary work, not to help them generate financial or material gain. All noble Lords, if they sponsor events, are required to satisfy themselves and certify that the rules have been followed. The noble Lord failed to do so, and his actions put the reputation of the House at risk.
We therefore concurred with the commissioner that a significant suspension was warranted and have recommended that the noble Lord, Lord Evans, be suspended for five months.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, under Standing Order 68, no debate is allowed on this Motion. I must therefore put the Question that this Motion be agreed to.
Lord Kakkar
That, in accordance with Standing Order 11, Lord Evans of Watford be suspended from the service of the House for a period of five months; and that, in accordance with section 1 of the House of Lords (Expulsion and Suspension) Act 2015, in the opinion of this House, the conduct giving rise to this resolution occurred after the coming into force of that Act.
Health and Care Act 2022 (Consequential Amendments) Regulations 2025
Baroness Blake of Leeds
That the draft Regulations laid before the House on 21 October be approved. Considered in Grand Committee on 4 December.
Victims and Prisoners Act 2024 (Permitted Disclosures) Regulations 2025
Lord Lemos
That the draft Regulations laid before the House on 16 October be approved. Considered in Grand Committee on 4 December.
Unmanned Aircraft (Offences and Consequential Amendments) Regulations 2025
(1 day, 6 hours ago)
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Lord Hendy of Richmond Hill
That the draft Regulations laid before the House on 21 October be approved.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 4 December.
Sustainable Aviation Fuel Bill
(1 day, 6 hours ago)
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Lord Hendy of Richmond Hill
That the order of commitment of Thursday 20 November committing the bill to a Grand Committee be discharged and that the bill be committed to a Committee of the Whole House; and that if the bill’s Committee stage is not concluded by the rise of the House on Wednesday 10 December, the bill be reported from the Committee of the Whole House in respect of proceedings up to that date; and that, for the remainder of the bill, the bill be committed to a Grand Committee.
OBR: Resignation of Chair
(1 day, 6 hours ago)
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Baroness Neville-Rolfe (Con)
My Lords, more and more information is emerging about the unfortunate decisions that individuals took during those weeks of pre-Budget speculation. Inspired by leaks from No. 10 and No. 11, stocks were sold, money was taken out of pensions, jobs were destroyed in hospitality and elsewhere, and hard workers and entrepreneurs left the UK to avoid rumoured exit taxes. There is a case for either an open pre-Budget process or a traditional purdah arrangement. There is absolutely no case for setting the rules in one way and acting in another. Will the Minister take that message home to his ministerial colleagues?
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
I am grateful to the noble Baroness for her question and the points that she made. I should say very clearly that we take the Budget process extremely seriously and put the utmost weight on Budget secrecy. She will know that a leak inquiry is now under way, with the full support of the Chancellor and the whole Treasury team. She will also know that the Permanent Secretary to the Treasury will conduct a review of the Treasury’s security processes to inform future fiscal events. We will, of course, also work closely with the OBR to ensure that robust security arrangements are in place before the spring forecast and for all future forecasts. On the other points that the noble Baroness raises, she will be aware that the FCA has now written to the Treasury Select Committee confirming that it has not commenced an enforcement investigation.
Baroness Kramer (LD)
My Lords, the Minister will be aware from things I have said previously that it would be worth taking a look at the Swedish approach and that of some other countries to an open Budget process that gets away from the kind of shenanigans that we saw in the past weeks. He did not answer me when I raised that before. Will he now commit to taking it back for the Treasury to look at and think about?
Focusing on the OBR, the more I look at this episode, the more I ask myself whether any digital-based data can be truly secure. It is almost like a cat-and-mouse game at the moment, with fists being put into dykes to try to stem leaks, but nothing is reliably effective, and AI will surely be a game-changer that aggravates this. Will the Government consider an open dialogue with the public, the media and, in the case of sensitive financial reports, the financial markets, to consider how we handle data in this changed world, so that we no longer have this environment of leaks and secrecy but find a better way forward?
Lord Livermore (Lab)
I am grateful to the noble Baroness. She raised her suggestion about the Swedish model before. I think I said then that I do not think that we had any intention of taking that forward, and I say the same thing again today.
It is important to say that we remain absolutely committed to the independence of the OBR. That is incredibly important to the fiscal framework and to our commitment to economic stability. Clearly, it is important that the information it has is treated with the utmost secrecy. That is why it is important that, as I have said, we will work closely with the OBR to ensure that it has robust security arrangements in place for how it treats information.
On the next steps that we intend to take, the OBR has rightly conducted its initial investigation as quickly as possible, and we should now take the time, as I think I have said to the noble Baroness before, to consider its findings and the report in greater detail. The report into the OBR also made the point that it
“could not, in the time available, carry out deeper forensic examination”
of other recent economic and fiscal outlook events and recommended that such an event takes place. We have committed to doing that with the National Cyber Security Centre, as I think the noble Baroness alluded to, although it is important that we note that the report found no evidence of hostile cyber activity.
Lord Grocott (Lab)
My Lords, this is a question asked in all innocence. It is now 15 years since the OBR was established. Some of us have lived through the period before the OBR and the period since. Does my noble friend know of any academic studies or the like that suggest that Budgets were better prepared, more efficiently kept secret where necessary and altogether held in higher esteem before the existence of the OBR compared with the period since, or is the reverse true?
Lord Livermore (Lab)
I am not aware of any academic studies into what my noble friend asks about. I had the privilege of working in the Treasury for 10 years before the OBR came into existence, and I have now worked on two Budgets since the OBR came into existence. It is worth repeating that the Government are committed to the independence of the Office for Budget Responsibility. There is academic evidence that suggests that stability has a significant advantage in terms of the performance of the economy, economic growth et cetera. The OBR should and does remain at the heart of economic and fiscal policy-making, and the strength of that institution is a vital pillar in the Government’s commitment to economic stability.
Lord Londesborough (CB)
My Lords, I have two brief points for the Minister. First, given the importance of the OBR, why is it so lightly resourced? Those of us who run businesses or organisations of 50 staff will know that IT and security systems will essentially be back office and unsophisticated, as indeed is the case with the OBR. What are the lessons going forward on resourcing the OBR?
Secondly, this leak appears to be a technical systemic error—a serious one, yes, and naive, certainly, but not deliberate. If that is a resignation matter for the chairman, what does this mean for personnel in the Treasury and No. 11 who have been involved in deliberate and extensive pre-Budget briefings and operations?
Lord Livermore (Lab)
On the first question, the noble Lord is quite right to identify back-office systems as one of the issues identified by the report. He talks about systemic risk. We will look at wider questions of the systemic risk that this incident has uncovered, including the report’s conclusion that the OBR’s information security arrangements should have been regularly re-examined and assured by the management of the OBR.
His second question he expresses as fact. It is, of course, just an assertion. We take the Budget process very seriously and we put the utmost weight on Budget secrecy. As I have said, a leak inquiry is now under way with the full support of the Chancellor and the whole Treasury team. The Permanent Secretary to the Treasury will also conduct a review of the Treasury security processes to inform future fiscal events.
Lord Leigh of Hurley (Con)
My Lords, the situation with the OBR is clear. What is not clear is what the OBR told the Chancellor in respect of income tax receipts before her briefing statement. Should it not be the case that all information supplied by the OBR to the Chancellor is revealed in retrospect after the Budget speech?
Lord Livermore (Lab)
I am not sure whether the noble Lord is saying that is his view or whether he thinks it should be the case. The Chancellor was aware of the letter that the OBR sent to the Treasury Select Committee. She was content for it to be published, and she agreed this with the Permanent Secretary. We put the utmost weight on Budget security. The OBR has chosen to publish some further information. That is set out fully in Richard Hughes’s letter to the Treasury Committee. We believe it is important to maintain a private space between the Treasury and the OBR for the exchange of forecast information and Budget policy development, so we welcome the OBR’s statement that this is not intended to become usual practice.
Lord Pannick (CB)
My Lords, over the last few weeks and today, the Minister has studiously avoided confirming that Ministers and officials briefed possible announcements in the Budget prior to the Budget occurring. Does he really deny that this occurred?
Lord Livermore (Lab)
As I have said before, we take the Budget process extremely seriously and we put the utmost weight on Budget secrecy. A leak inquiry is now under way with the full support of the Chancellor, and the Permanent Secretary to the Treasury will also conduct a review of the Treasury’s security processes to inform future fiscal events.
Lord Sandhurst (Con)
With respect to the Minister, that is not an answer to the question. Will he confirm or deny?
Lord Livermore (Lab)
As I have said before, we take the Budget process very seriously and we put the utmost weight on Budget secrecy.
Baroness Wheatcroft (CB)
How much stress does the Minister think should be put anyhow on forecasts of relatively small numbers that can turn out to be extremely wrong?
Lord Livermore (Lab)
The noble Baroness is right about the outcome of certain forecasts. As I have said before, we remain committed to the independence of the Office for Budget Responsibility and its role at the heart of economic and fiscal policy-making. As I said in an answer to one of my noble friends, there is evidence that a greater level of independence creates greater levels of economic stability, and that can only be a good thing.
Official Secrets Act and Espionage
(1 day, 6 hours ago)
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Baroness Finn (Con)
My Lords, the report from the Joint Committee on the National Security Strategy describes the handling of the Cash and Berry case as “shambolic” and highlights serious systemic failures and deficiencies. The report raises serious concerns about the ability of the Government to pursue those who want to undermine our security. The chair of the committee, a Labour MP, has urged the Government to show the public that they are confident in standing up to adversaries when required. Will the Minister commit to responding to and implementing the key recommendations of the report? Can she now confirm that the Government accept the conclusion of this report that there was clear evidence that China poses a threat to the UK’s national security?
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
I thank the noble Baroness for her questions. I join her in thanking the Joint Committee on the National Security Strategy for its scrutiny and its work in shining some light—where there has been a great deal of heat—on what actually happened. On the key points that she has raised, we will reflect on the committee’s findings and I look forward to debating them with her across this Dispatch Box in due course when we come forward with our response to the report. I remind her of the Prime Minister’s comments at the Lady Mayor’s banquet last Monday about our position: China
“poses real national security threats to the United Kingdom … It’s time for a serious approach, to reject the simplistic binary choice. Neither golden age, nor ice age”.
He said:
“So our response will not be driven by fear, nor softened by illusion. It will be grounded in strength, clarity and sober realism”.
Baroness Tyler of Enfield (LD)
My Lords, rather than simply blaming outdated espionage laws, does the Minister agree with me, as a member of the Joint Committee, that, given the parallels in the new legislation, they will need to be carefully handled to prevent a similar outcome happening again? What assurances can she give that these lessons will be learned and acted upon? Is she able to cast any light on the fact that it took eight months for the second witness statement from the Deputy National Security Adviser to emerge—the reasons for which, the report of the committee said, were very obscure?
Baroness Anderson of Stoke-on-Trent (Lab)
I thank the noble Baroness for her work as a member of the committee. I make it clear that we keep all legislation and its effectiveness under review, and we will continue to do so under the new National Security Act 2023. I would like to reassure your Lordships’ House that one of the things we have already done was a change in the mechanism of government: the Security Minister now has joint responsibilities to the Home Office and the Cabinet Office, ensuring a level of co-ordination on some matters.
On her second point about timings, my understanding is that it did not take eight months on the government side. I will talk noble Lords briefly through the timeline: counterterrorism police first approached the Cabinet Office for discussions on the second witness statement on 25 November 2024, and the Cabinet Office then submitted the second witness statement on 21 February 2025. In the months between, the Deputy National Security Adviser was clarifying the request and working with a small number of officials from the National Security Secretariat, but our appreciation is that it was not eight months.
Lord Sikka (Lab)
My Lords, labelling something an official secret is all too convenient a way for the Government to keep people in the dark. One example is BCCI, a bank that was forcibly closed in July 1991 but there has never been a full independent investigation. After five and a half years of legal battle, I obtained one document called the Sandstorm report. It shows that the Government were funding al-Qaeda and protecting arms smugglers, murderers and others. Will the Minister now ensure that the document is made publicly available and at least put in the Library of this House so that we can hold the Government to account? What is so secret about it? I have put it on the internet and everybody can see it. Why can the Government not release it?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I usually practise for left-field questions but I was not ready for that one. I thank my noble friend for his question and I will reflect on what he says, but let us be clear: the clear responsibility of this Government, as for any Government, is national security, and we will never undermine that.
Lord Macdonald of River Glaven (CB)
My Lords, does the Minister recognise that the statements of the Deputy National Security Adviser in the recent Chinese espionage case provided ample and sufficient grounds for the prosecution of that case?
Baroness Anderson of Stoke-on-Trent (Lab)
I put on record my thanks to the Deputy National Security Adviser. He is an exemplary professional and has provided evidence in line with government policy of the time and government policy today. We continue to work closely with him and we are very grateful for his work. Noble Lords will appreciate that I am not noble and learned, just noble. On that basis, given that I am not a lawyer, this is not something that I can comment on, but we were very disappointed to see the case not taken forward.
Local Elections
(1 day, 6 hours ago)
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Baroness Scott of Bybrook (Con)
My Lords, three weeks ago, in this Chamber, the Minister assured the House that the Government intended to go ahead with all local elections in May 2026. What has changed in just three weeks? Were local government and the Electoral Commission consulted on these changes?
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
I am grateful to the noble Baroness for her question. All local government elections that are scheduled for 2026 will go ahead unless there are exceptional circumstances. These elections, which are inaugural elections for four new mayors in the areas concerned, have not taken place before, and my colleagues have taken the opportunity to reflect on the most effective way of ensuring that those mayoral institutions are best placed to deliver.
We know that mayoral strategic authorities are most successful when they are built on a strong history of partnership and joint delivery. Moving forward, we are seeking to facilitate the establishment of those foundational strategic authorities to build the local capacity and collaboration that is needed ahead of accessing mayoral powers. We think that this will make them stronger in the long run and make sure that those authorities are built on firm foundations. That is why the decision has been taken to have those mayoral elections in 2028. My colleague, Minister Fahnbulleh, spoke to all local authorities on 3 December.
Baroness Pinnock (LD)
My Lords, the move to compulsory unitary authorities, at the same time as creating mayoral authorities, is clearly causing confusion and delay. Cancelling elections denies electors their fundamental right. Councillors remaining in office for seven years when elected for a four-year term is simply not acceptable. Can the Minister set out in detail, in writing if necessary, a clear timetable going forward for all those authorities affected?
Baroness Taylor of Stevenage (Lab)
We must not conflate the two things. The devolution programme, which is working at pace, and the local government reorganisation process are running side by side, but they are not the same thing. That is why the decision has been taken to postpone mayoral elections in the four priority areas until 2028. The other two areas in the priority programme will have their mayoral elections in 2027, as they had already requested and as had already been decided. On other elections taking place, elections due in 2026 in county councils in those areas concerned will take place. Three of the areas are elected by thirds anyway, so they will have their elections as usual, and the district council elections that are due to take place in 2026 and 2027 will take place as scheduled.
Lord Bassam of Brighton (Lab)
My Lords, does the Minister agree that it is far better to get the structures of local government right and produce good-quality public services than it is to become overly obsessed with the cancellation of elections? Obviously, cancelling elections is never highly desirable, but all Governments have had to do this from time to time when faced with the prospect of reorganising local government and trying to improve what it delivers.
Baroness Taylor of Stevenage (Lab)
I agree with my noble friend, and I am slightly puzzled about the giggling from the other side of the Chamber, because this is an important lever in devolution for delivering growth and prosperity for our communities. We want to bring local transport back into public control to make people’s daily commutes easier, tailor local skills and training to employers’ needs so that people can get good jobs, and drive the regeneration of our local areas so that people feel proud of the places they live in. In order to do that important work, we need established local unitary authorities as the component parts of a strategic authority. That is why the decision has been taken to get those authorities set up properly. Funding will be available to them to start the work, and then the mayors will be elected in 2028.
Lord Fuller (Con)
My Lords, the Government are committed to a pattern of unitary government by the next election in 2029. If these mayoral elections are to be delayed until 2028, what is the pattern for the rest of the unitisation in the remainder of this Parliament? What steps will be taken to make sure that equality of electoral representation, which in the shires is about 9,000 electors per councillor, is equated in London, Birmingham, Manchester and the mets, where it is currently 3,000?
Baroness Taylor of Stevenage (Lab)
My Lords, the programme of local government reorganisation outside of the priority programme is proceeding at pace. We have received proposals from all the areas that were invited to put in their proposals by 28 November. We are now out for consultation, which has already started, and we will make announcements on that by March next year. The timetable for that further devolution and local government reorganisation will be announced, and the timetables will come forward then. I pay tribute to all my former colleagues in local government, who have worked together in a fantastic way to pull together these proposals. Some of them have told me that it has been a positive experience, which is good to hear. It is good to see them working together in such a collaborative way.
Lord Grocott (Lab)
Does my noble friend, with her long and distinguished experience of local government leadership, agree that, all too often, major local government reorganisations take longer than anticipated, cost more than anticipated and deliver fewer savings than anticipated? With that knowledge, which I am sure she is aware of in approaching her current duties, will she at least undertake to keep the House informed of any cost implications in extending the period of office of existing local authorities and any other associated costs?
Baroness Taylor of Stevenage (Lab)
I thank my noble friend for his question. I am always willing to come before the House and explain the impact of our programmes on local government. We remain committed to extending devolution to all corners of England. Under the last Government, we had a patchy and inconsistent approach, which meant that some areas were moving forward quickly on this and others had not even started the journey. Our commitment is to extend that devolution to all corners of England. We confirmed on 4 December the long-term funding offer for the six areas on the devolution priority programme, and we have committed close to £200 million collectively per year for 30 years to those new mayoral strategic authorities—some of that funding will be released earlier. This is really important. In my long experience in local government, we have put off these decisions around local government for far too long, and we have ended up with local government that is not sustainable for the long term. It is time to change that now, and I am committed to doing that. I am happy to report back to the House on how that is going.
Baroness Bennett of Manor Castle (GP)
I declare an interest in that the Green Party candidates were already working hard in these four elections and at least two of them had a good chance of winning next year. The MHCLG has said that Ministers still intend to lay the statutory instruments for the creation of the four mayoral strategic authorities as soon as possible to allow an interim period of preparation before the delayed mayoral elections. These areas will, at that time, have access to some powers, functions and funding. Will the Government clarify what this means in practice and what powers and functions will be available during the interim period?
Baroness Taylor of Stevenage (Lab)
Yes, I am very happy to do that. The strategic authorities are being set up and we will have no delay in laying the statutory instruments—it is very important that those statutory instruments go ahead as quickly as possible. Those mayoral strategic authorities will have a number of functions available in the interim period to their mayoral election to make sure that they are working to encourage the investment that we all want in their areas. I will write to the noble Baroness with the detail but, just to run through quickly, they will have a general power of competence; a duty to develop a local growth plan; power to pay grants to constituent councils; power to borrow to an agreed cap; adult skills function powers; a health improvement and health inequalities duty; functions to acquire land, provide housing and build infrastructure; and responsibility for public transport and local transport planning. There is a lot for them to be getting on with.
Lord Hayward (Con)
My Lords, when we discussed these elections the other day, the Minister, for whom I have great respect, suggested that I was dancing on the head of a pin. I am a little surprised that, only a few days later, she should be coming forward and dancing on the head of possibly a very different pin. Does she agree with the comment in the other place from the Labour MP for Oldham West, who said
“we need to be better than this”?—[Official Report, Commons, 4/12/25; col. 1166.]
Local leaders across the political spectrum have worked in good faith. They have put aside self-interest and differences and have done everything asked of them to secure a better settlement for the people they represent. They reasonably expected the Government to do the same. Why have the Government not done the same?
Baroness Taylor of Stevenage (Lab)
I am very grateful to my honourable friend in the other place for all the work that he did in laying the ground for this local government reorganisation and the devolution programme. He is very committed to it, as I know only too well, having worked with him very closely. However, it was right that, when the new team came in, they took a step back and had a good look at this. I do not think that I am dancing on the head of a pin in terms of elections. All the elections that were due to take place in 2026 will take place; these are four inaugural elections for new mayors. It is right that we build that strong foundation of those unitary authorities before we go ahead with the mayoral elections.
English Devolution and Community Empowerment Bill
(1 day, 6 hours ago)
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Baroness Taylor of Stevenage
That the Bill be now read a second time.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I first extend my thanks to the many noble Lords with whom I have already spoken about this Bill. I am grateful for their engagement with this very important legislation. I know that a number of noble Lords have been closely engaged in delivering front-line services over the years, so I would like to take this opportunity to thank all those in this House who have taken part in that. We know that our residents greatly value the services that impact their daily lives. This whole Bill will bring that decision-making closer to the areas and communities that it impacts.
This Government were elected on a manifesto to deliver change. We are determined to transform our economy and our country through a decade of reform that delivers better public services and growth in every community and every corner of our country. Many hard-working communities that are the backbone of our economy have been neglected for far too long. They have seen good jobs disappearing, their high streets in decline and the dream of a decent home pushed even further out of reach.
Rebuilding these foundations is central to this Government’s mission, but we will not achieve our goals unless we fundamentally change the way our country is run. That means handing power back to local people, who know their areas best, so they can make decisions on what really matters to their communities. This is what the English Devolution and Community Empowerment Bill will do—drive the biggest transfer of power out of Whitehall to our regions and communities in a generation. The Bill will make devolution the default setting. It will give mayors new powers over transport, planning, housing and regeneration; rebuild local government so that it can, once again, deliver good local services that people can rely on; and empower local communities to have a bigger say in shaping their local area.
Strategic authorities are at the heart of this change. The Bill is creating strategic authorities as a new category of authority in law. They will make it easier for local leaders to work together over larger areas to drive through big, pro-growth projects such as integrated transport networks and housing. Crucially, the Bill will give new strategic authorities powers to pilot and request new functions, with government having a duty to respond to requests by established mayoral strategic authorities. Strategic authorities will operate at three levels: foundation, mayoral and established mayoral, and the Bill will define the powers and responsibilities of each of those levels.
Working alongside parliamentarians and local councillors, mayors will drive forward the delivery of people’s priorities, igniting growth and unlocking opportunities for their local area. That is why the Bill will give them wide-ranging new powers in areas such as transport, planning and economic development, which have a real impact on people’s lives. For example, mayors will be able to intervene in strategic planning applications to unlock housing, and there will be powers for all strategic authorities to license shared cycle schemes so that they work for everyone and we do not see bikes strewn across all our pavements.
The Bill will also see more mayors take on police and crime commissioner functions and become responsible for fire and rescue authority functions, allowing them to take a joined-up approach to improving public safety. They will also be able to appoint commissioners to support them as their responsibilities grow, similar to the way this works in London.
The Bill is the floor, not the ceiling, of the Government’s ambition and we have already demonstrated how seriously we take mayors’ rights to request new powers. We announced at the Budget that mayors will be given the power to raise revenue locally through a new overnight visitor levy, and we are consulting on whether to also grant this power to foundation strategic authorities. This is a ground-breaking step for the future of devolution, with transformative investment potential for England’s tourism sector and the wider economy. This Government are committed to giving mayors the tools they need to drive growth and deliver for local people.
None of this reform can be achieved without strong local government. Councils are the bedrock of our state. They are critical to delivering local public services that people can rely on, but they have been neglected for too long. The Bill will help rebuild local government as a “fit, legal and decent” foundation of devolution. It will establish the local audit office to help fix the broken, fragmented local audit system—nobody who has been in local government over the last few years will pretend the audit system is working properly.
We will also reform local authority governance by requiring councils with a committee system to move to a leader and cabinet model or, otherwise, undertake and publish a review on the decision, while putting a stop to new local authority mayor roles being created. This change will streamline decision-making across all councils, making it easier for people to understand how their council is run, while also respecting local democratic mandates where the committee system was adopted more recently following either a council resolution or a public referendum. In those cases, we will allow them to continue for the period that was voted for.
The Bill will also give the Government the tools to deliver local government reorganisation across England, resulting in better outcomes for residents and savings which can be reinvested in public services. I know that noble Lords have raised concerns about the powers we are taking in the Bill to incentivise local government reorganisation. To be clear, reorganisation is a crucial part of the Government’s mission to fix the foundations of local government, creating unitary councils that can deliver the high-quality services that all our residents deserve.
I assure noble Lords that we are fully committed to working in partnership with local areas. Our long-standing position remains: we will always seek to work with local areas on proposals for reorganisation brought forward by local areas. This Bill will enable the Secretary of State to direct areas to submit proposals to reorganise, but this power will only be used as a last resort when areas have failed to make any progress following an invitation.
As I have previously laid out, we want to give mayors the tools and opportunity to unleash the potential of their area with a more ambitious role and deeper powers. Each mayor will serve millions of people and manage multimillion pound budgets. This role has to be underpinned by elections that command public confidence. The Bill will revert elections for mayors and police and crime commissioners to the supplementary vote system after the May 2026 elections to provide greater accountability and a strong personal mandate. This was the voting system in place when mayors were first established, and it is the best system for electing people to single executive positions. In addition, the Bill will bar mayors from also sitting as MPs, ensuring that local places benefit fully from having dedicated local leaders.
We are not just giving mayors more power; we are also handing more control directly to the communities they serve. This Bill will give local communities a bigger say in shaping their place, with councils required to make sure that effective neighbourhood governance is in place. Communities will also have the tools to transform their high streets and neighbourhoods through a new community right to buy to save much-loved community assets such as pubs and shops from being lost, and to protect sports grounds, which are at the heart of so many communities and a source of great local pride. The Bill will also support our high streets by banning the unfair practice of upwards-only rent reviews, preventing the blight of vacant shopfronts. Every community should have the opportunity to thrive, and these measures are fundamental steps in achieving this.
I will now turn to a few amendments we made to the Bill in the other place. We have listened to parliamentarians and the sector and have introduced a modest number of amendments to ensure that the Bill functions correctly and delivers for local people. First, on London’s strategic licensing, I am sure noble Lords will agree that London’s pubs and restaurants are the beating heart of London’s cultural life. They contribute to our capital’s world-class status and to the growth of the economy. Yet for too long, hospitality businesses have been held back by a licensing regime that lacks proportionality, consistency and transparency. That is why we have brought forward amendments to establish a new licensing regime in London that will give hospitality businesses greater confidence and create the conditions for London’s night-time economy to thrive.
These amendments will also introduce a call-in power for the Mayor of London to determine borough licensing applications of strategic importance. The policy direction of the call-in amendment is clear. However, to ensure we fully digest any wider changes to the operation of licensing as a result of the call for evidence from the licensing policy taskforce—which closed on 6 November—we will bring forward more detailed amendments at a later stage in the Bill and we will continue to engage with noble Lords on this.
To support this Government’s commitment to deliver 1.5 million homes in this Parliament, we have taken steps to cut unnecessary and duplicative bureaucracy. Amendments have been introduced which will allow mayors to adopt a written representation procedure when determining certain planning applications of potential strategic importance and which remove the requirement that the local planning authority must consent to mayors of strategic authorities when making, revising or revoking a mayoral development order. However, I assure noble Lords that this change is not an attempt to bypass local planning authorities. Mayors will still have to bring them along as they will be crucial to delivering these orders. It is about empowering mayors so they can provide the strategic leadership that areas deserve.
We have also brought forward an amendment which will devolve the approval of lane rental schemes from the Secretary of State for Transport to mayors of strategic authorities, putting decisions in the hands of those with knowledge of their area.
On taxi and private hire vehicles, the Government recognise the challenges that the current licensing framework can cause, including inconsistent standards across the country and the practice of “out-of-area” working, where drivers choose to license in one authority area but work wholly or predominantly in a different authority area. As highlighted by the noble Baroness, Lady Casey of Blackstock, in her recent National Audit on Group-based Child Sexual Exploitation and Abuse, out-of-area working creates concerns in some authorities about the safeguarding standards applied to some of the drivers operating in their area. The Bill therefore creates a power for the Secretary of State to set national minimum standards for the licensing of drivers of taxis and private hire vehicles. Setting these licensing standards will help bring some consistency across licensing authorities.
Finally, we have taken concrete steps to ensure that local government members are able to perform their duties without fear for their own safety or that of their family. The world has changed a lot since I started being a councillor and this Government are clear that intimidation, harassment and abuse have no place in our democracy. This Bill puts it beyond doubt that a member’s, or co-opted member’s, home address should not be published by default. The amendment we introduced will also prevent the disclosure of home addresses when they are declared as interests at public meetings.
I know we all share a wish to set the sector on a firmer footing, ensure local government is fit, legal and decent, and empower communities to deliver real change and opportunities. We believe this Bill is a fundamental step in achieving this. By enabling the biggest shift of power from Whitehall to local areas in over a generation, this Bill will support the change residents expect and deserve: better joined-up delivery of public services, good jobs and politics being done with communities, not to them. I move the Bill.
Baroness Scott of Bybrook (Con)
My Lords, I declare my interest as vice-president of the Local Government Association, and the National Association of Local Councils.
I hope the House will forgive me if I begin by noting a certain irony in the title of the Bill. It contains the words “community empowerment”, yet the measures before us would appear to do precisely the opposite, empowering the centre rather than the community. As we reflect on that, we cannot ignore the democratic chill cast by the Government’s decision to cancel the forthcoming local mayoral elections. When democratic participation is suspended for administrative convenience, it becomes difficult to sustain the claim that community consent lies at the heart of these reforms. Instead, what emerges is a model of compulsion over consent. These proposals risk leaving communities without a meaningful voice, enabling the Secretary of State to redraw local government boundaries, restructure authorities and compel mergers, against local wishes.
The introduction of sweeping powers under new Section 109B, and others, marks a striking departure from the voluntary, negotiated, deal-by-deal approach that has defined English devolution to date. That approach was rooted in respect for local identity, geography and choice. The Bill before us seems to move away from that principle with unsettling ease. Our discussions with colleagues and stakeholders underline something fundamental: that local consent is not an optional extra. It is the democratic foundation of any credible programme of localism, yet this Bill weakens that foundation at the very moment when it should be reinforced.
The Government claim that reforms empower localities, but too often we see the power devolved in name only, while genuine authority remains firmly centralised. Without clarity on what powers are truly being passed down, how responsibilities differ from those already held and how local leaders will be held to account, there is a real risk of creating an accountability gap at the very centre of the system.
These concerns are sharpened still further by the Bill’s uncertain financial implications. Community empowerment is impossible without financial empowerment. Local authorities cannot reasonably be asked to shoulder the burdens or the liabilities of their neighbours; nor can local taxpayers be expected to underwrite centrally imposed restructuring. Yet the Bill provides no assurance that council tax will not rise, no clarity on whether solvent councils may be required to absorb the debts of failing ones, and no explanation whatever of how these reforms will deliver value for money. Additionally, we are still in the dark as to how these new mayoralties will be paid for.
We hear much about synergies and efficiencies but nothing about what they are, how they will be realised, or what modelling, if any, underpins them. Rhetoric is not a substitute for a costed plan. The Government must commit to publishing a detailed cost-benefit assessment. Information available shows that the creation of more top-tier councils in place of the county councils may increase costs year on year, not reduce them. It reverses the economy of scale and offers no prospect of long-term savings.
Recent freedom of information disclosures reported by ITV Meridian indicate that the councils in Essex, Kent, Sussex, Surrey, Oxfordshire, Hampshire, and on the Isle of Wight have already set aside £11.22 million for 2025-26 to support this transition, with more than £1 million being spent in the current year alone. In Hampshire, over £500,000 has already been allocated to consultants for local government reorganisation. How can local taxpayers be assured that this represents value for money? Will there be a transparent framework, underpinned by evidence, to demonstrate whether these substantial outlays can genuinely be recovered through future efficiency gains?
This reorganisation will impose real costs on our constituents, at a time when many of them are already paying more in income tax and national insurance, whether through their earnings or their pension contributions, because of this Government’s choice to value welfare over work. We cannot in good conscience simply accept that reform must be expensive without being provided a credible vision for future savings and long-term fiscal stability.
Nowhere is that risk more acute than in social care. Adults’ and children’s social care are among the most vital, sensitive and fragile of all our local services, but the Bill is silent on how these functions will operate across new combined structures, how responsibilities will be shared and how accountability will be maintained. At a time when care systems are already stretched to their limit, reorganisation without clarity is not merely unwise but dangerous. Vulnerable people cannot be left to navigate the fog created by institutional reform.
This is not the only area where ambiguity prevails. The Bill creates new regulatory layers, including a local audit office, the relationship of which with existing bodies is left largely undefined in the Bill. We all agree on the importance of rigorous oversight, but the creation of new regulators must be justified by purpose, rather than just by preference. Likewise, spatial development strategies, critical tools for planning and housing, are referenced in a manner that leaves scope, governance and oversight uncertain. Without clarity, there is a real risk of slowing down the very growth and housebuilding the Government claim the Bill will accelerate.
I will touch on the significant alterations proposed to some of the Local Government Pension Scheme arrangements. When local government reorganisation occurs, and assets and liabilities are carved up, it is essential that independent assessments are undertaken, to allow proper oversight of what funds and actuaries in each region are doing. We must also explore the workability of the new duty requiring combined authorities to assist in identifying or developing LGPS investment opportunities. These are legitimate concerns that such a requirement will place authorities in direct conflict with the scheme managers’ fiduciary responsibilities, which must remain independent and focus solely on the interests of the scheme members.
Taken together, these examples illustrate a broad problem: the lack of clarity speaks to a wider issue in the Bill’s design. This is a substantial piece of legislation that is constitutionally significant in both scale and ambition, yet the Government have offered no clear explanation of what it is ultimately for. Is the goal efficiency, local empowerment, public service reform, fiscal consolidation, housebuilding or economic growth? A Bill of this breadth and consequence should be founded on a coherent purpose, yet the rationale before us is diffused, undefined and, at times, contradictory.
The Bill professes to empower communities but many of its consequences appear likely to impose costs on them instead. New mayoral precepts, expanding borrowing powers, increased parking charges and the creation of further layers of local bureaucracy, including mayoral commissioners, will all place additional burdens on our residents. If that is empowerment, it is of a kind that, we believe, comes with a higher council tax bill attached to it.
The House will recall that we have made the point previously that uncertainty, particularly in planning, is the enemy of delivery. If responsibilities for housing, infrastructure and spatial strategy are to shift, the transition must be clear, orderly and transparent. Developers, councils and communities need certainty, not disruption. Local authorities understand their housing needs, their land, their constraints and their potential better than anyone in Whitehall ever could; therefore, reform should strengthen that local knowledge, not sideline it, as the Bill does.
Consistent with that theme, I will address another important issue: local identity. Imposing reorganisation from above, drawing maps in Whitehall and instructing local people to accept new boundaries pose a genuine threat to the character and cohesion of the communities we represent. Local identity is the foundation on which trust, participation and civic pride are built. We must also reflect the role played by our town and parish councils. They should and could be custodians of our children’s parks, our green spaces and the amenities that give neighbourhoods their distinct character. If their powers are to be subsumed into larger unitaries, dominated by broader, macro-level concerns, how can we ensure that the priorities of those towns and parishes across our country will still be recognised and respected? These councils are not peripheral; they are central to the everyday life and well-being of our communities. In fact, we believe that we should be encouraging more towns and parish councils when representation is subsumed by a larger geographic area.
If the Bill is truly to live up to its title, it must move from the rhetoric of empowerment to the practice of it. It must restore local democracy, not dilute it. It must clarify responsibilities, not obscure them, and it must build trust, not central control. Communities do not require permission to have a voice; they require the power to use it. True devolution rests on partnership, consent and clarity, not on imposition or ambiguity.
In Committee, I will challenge the Government on whether the Bill meets that aim, not only in areas where reorganisation is already under way but in areas such as London and Greater Manchester, where devolution exists but we believe it could deliver better. If the Government wish to empower communities, let the Bill begin by listening to them; only then can they claim with any confidence to speak in their name. As drafted, the Bill takes power away, increases costs for working people and, most of all, leaves communities without a voice.
Lord Wallace of Saltaire (LD)
My Lords, I have much sympathy with what the noble Baroness, Lady Scott of Bybrook, has said, but I am puzzled, because the Bill is very much in line with the direction in which the last Conservative Government were taking us, and I had thought that she was then a Minister. I have not forgiven the last Conservative Government for the artificial institutions they imposed on Yorkshire in the face of resistance from all the councils in Yorkshire. I have not forgiven the Conservatives either for starving local government of funds, without which it is impossible for local democracy to work.
The White Paper and the Explanatory Notes for the Bill set out the problem it was trying to address, saying that:
“England is one of the most centralised countries in the world”,
that there is a serious and “long-term decline” in public trust in politics, and that three-quarters of our citizens feel powerless to influence decisions affecting their local area. It states that Westminster politics faces a
“wider feeling of disempowerment and distrust at a local level”.
The Liberal Democrats fear that this alienation from democratic engagement feeds into a broader disillusionment with democratic politics and democratic parties as a whole.
The changes the Bill proposes will not meet these challenges. Strategic authorities are not local government, nor are many unitary authorities of 500,000 people or more. Local communities—the word “communities” is thrown around a great deal in the Bill—are found in our towns, villages and urban neighbourhoods. The White Paper promises that the Bill will
“empower communities to take back control from Westminster”.
Instead, it takes power and representation further away from local communities, giving it to mayors, who are responsible for several million people. It promises that the new authorities will cover
“areas that people recognise and work in”.
That may fit England’s metropolitan areas, but it creates unrecognisable and artificial authorities elsewhere. This is decentralisation, not devolution. The Secretary of State retains extensive powers to direct, intervene and alter the new arrangements. These are executive powers, without continuing scrutiny from Parliament—“elective dictatorship” is the charge that the late Lord Hailsham made about an earlier Labour Government.
The 1997 Labour Government, in co-operation with the Liberal Democrats, devolved powers to Scotland and Wales. Labour’s half-hearted plan to devolve some powers to regional authorities collapsed with the defeat in the north-east referendum, in which Dominic Cummings played as negative a role as he later did in Brexit. A Tory-Labour consensus has since emerged that fewer, larger local authorities are cheaper and easier for central government to work with, and that elected mayors are far more to be trusted than elected councillors. It became the conventional wisdom that these bodies should be as uniform as possible in size and functions, with a minimum of 500,000 people for unitary authorities, which is significantly larger than London boroughs—I point out to the noble Lord, Lord Gascoigne—for some unexplained reason, with subregional strategic authorities significantly smaller in population than London.
This does not reflect the complexity and distinctiveness of England’s different regions. What suits London and Manchester will not easily fit Devon and Cornwall. I remind the noble Baroness, Lady Scott, again that the last Conservative Government disregarded the overwhelming consensus of Yorkshire’s local leaders that we would prefer a regional framework to take powers back from London and imposed combined authorities and mayors on the moors and dales of North Yorkshire, as well as on the reluctant combination of urban Hull and rural East Yorkshire. The Bill will complete the imposition of the new strategic mayoral model across the country.
Moreover, it will ban the further introduction of mayors in unitary authorities on the spurious grounds that uninformed voters might be confused by the duplication of titles. French and American citizens manage all right with elected mayors at multiple levels, but English voters are clearly not able to understand.
The Bill is constitutionally incoherent and democratically deficient. Labour’s 2024 manifesto said almost nothing about English local democracy, except that:
“As recommended in the Report of the Commission on the UK’s future, we will establish a new Council of the Nations and Regions”,
and that, in the long term,
“Labour is committed to replacing the House of Lords with an alternative second chamber that is more representative of the regions and nations”.
We already know that serious reform of the Lords has been kicked into the long grass. The new Council of the Nations and Regions is a shadowy body, with the Mayoral Council for England tagged on as almost an afterthought.
We all agree that too much of our Civil Service is based in London. It is in London because that is where too many decisions about local policy and spending are made. The Bill does little to shift policy decisions out of London and nothing to ease the financial crisis of local government, nor to strengthen the ability of mayors or unitary authority leaders to negotiate fiscal priorities with the Treasury and central government. An alternative second chamber might well begin to rebalance UK politics away from overdependence on London, but that is far too radical an idea for Labour to pursue, for all that Gordon Brown recommended it.
The Bill’s answer to the problem of public mistrust and alienation is to offer an elected mayor for a distant strategic authority, accompanied by up to seven commissioners who will be
“independent appointees, made by and accountable to the mayor”,
who will
“act as extensions of the mayor”.
Once in office, strategic authority mayors will be almost as much elective dictators as Prime Ministers. This places excessive trust in mayors and excessive distrust in councillors.
Many of the most effective and useful Members of your Lordships’ House are former councillors. When I first joined the Lords, I rapidly learned to respect their experience and their understanding of how policies are implemented on the ground. Councillors are the elected representatives closest to our alienated and disillusioned citizens. The councillors I know in West Yorkshire, representing wards with 10,000 to 15,000 voters, struggle to get to know the different communities and issues within their enormous wards. This Bill will leave them with even less chance of representing the interests of their voters as it transfers powers upwards from local government to strategic authority mayors.
Clause 60 imposes a duty on local authorities to make
“appropriate arrangements to secure the effective governance of any area of a specified description”,
which it calls a “neighbourhood area”. There is no mention of any direct elections here for neighbourhood representation. Presumably, it envisages area committees of councillors for several wards, roughly the size of a parliamentary constituency. Under that, the vast majority of our citizens will not personally know or recognise any elected representative. Repeated reductions in local authority budgets and programmes have left swathes of our cities without any significant contact with democratic institutions or public services. No wonder so many of them are distrustful and suspicious, and inclined to vote for those who tell them that democracy is a conspiracy.
Labour believes that it is delivery that matters, not participation in public life. Liberal Democrats believe in active citizenship as a fundamental part of democracy. We will press for really local councils to be an essential part of this new structure. It should be a matter of concern for Labour that town councils exist most often in prosperous communities and least often in inner city communities where discontent with democratic politics is at its strongest.
There is a glaring contradiction here between this assumption of passive citizens and the weight the strategic defence review places on mobilising all our citizens in their local communities to strengthen national resilience and respond to threats to national security. We discussed the SDR’s call for a whole-of-society approach in this afternoon’s Questions. The concept follows Swedish and Finnish models—two countries with strong local government and much higher levels of public trust in government. We will never manage to build a whole-of-society approach to national resilience and to the response to threats if most of our population feel left outside democratic life.
The proposal to reintroduce the supplementary vote is a classic example of the half-hearted Labour approach to democratic change. This was Jack Straw’s reluctant compromise for London mayoral elections. He intended it to help Labour by capturing Liberal Democrat votes, thus maintaining the two-party competition between Tories and Labour. Now—as I am sure we all know—we have a five-party system in England, as the polls have consistently shown since last year’s election, and we need to move to a system which reflects the diversity of electoral opinion rather than the conservatism of the current Labour Government.
There are of course proposals in the Bill that we welcome: the much-needed restoration of an effective system of local audit, and the powers to take buses into firmer local control, for example. My noble friends will speak further on these and other clauses. I welcome the Government’s willingness in the Commons to accept some reasoned criticisms and incorporate them in government amendments, and I hope we will see a similarly constructive dialogue here. We on these Benches will do our best to improve this ill-thought-through Bill, while maintaining our commitment to a structure for English governance which would be more democratic and more attuned to England’s local and regional diversity.
Lord Best (CB)
My Lords, my contribution today addresses one ingredient in the Bill that is easily overlooked but which could prove of immense significance in achieving the quantity and quality of new homes the nation needs. I am referring to the measures in Part 2 that will facilitate strategic authorities—mayors and combined authorities—establishing mayoral development corporations and development corporations of combined authorities, including combined county authorities. These development corporations can take on planning powers, land acquisition and development powers. They will be single-minded and focused on achieving new housing and all the related infrastructure. This will create an alternative to the nation’s current total reliance on a small number of volume housebuilders who plan, design and provide most of this country’s new housing development but who so often fail us in what they produce.
Development corporations can trace their origins to the establishment of overarching planning and development bodies for the pre-war garden cities, and then for the 32 post-war new towns. The most recent example is the London Legacy Development Corporation, or LLDC, which has been doing such good work in the redevelopment of the Olympic site and its environs. Development corporations are already the chosen vehicle for delivery of the new generation of new towns, as set out in the excellent report from the New Towns Taskforce published in September. New town development corporations will follow the pattern of land acquisition and land value capture, creating a master plan, with private financing, and long-term, overarching control in the hands of a publicly accountable body. Now this Bill enables all strategic authorities to establish their own development corporations and assume the same roles as the new town development corporations.
For some years, I have championed the report by Sir Oliver Letwin which dates back to 2018. The Letwin review pointed out that the oligopoly of volume housebuilders will build only at the speed they can sell, without having to reduce their prices. This has ensured that there is always a gap between supply and demand, leading inexorably to growing housing shortages. Letwin recommended ending our dependency on developers that, entirely predictably, work at their own pace and negotiate down the standards and quotas of affordable housing to maximise their profits. In their place, Letwin advocated the establishment of development corporations that would acquire the land and capture the increase in its value when planning consent was subsequently granted. The development corporations’ master plans can then parcel out the site to different profit-making and non-profit-making bodies, covering the full range of types, tenures and uses: housing for sale but also for shared ownership, market rents and social rents; housing for older people and for students, with specialist and pioneering ingredients; plus the place-making green spaces, mixed uses and amenities needed for all new homes.
As an example of the potential of this approach, the Devon Housing Commission, formed by the local authorities in that county, pointed to the opportunity for a development corporation to develop strategic sites in Devon. This would ease pressure on the county’s 10 planning authorities, with the combined county authority taking a cross-boundary view for exemplary major developments. The danger here is that mayors and combined authorities have other important matters to handle, and this route to more and better housing provision may not lead to the strategic authorities taking advantage of the opportunity presented by the Bill.
I have three questions for the Minister, who has a deep understanding of these issues. First, will the Ministry of Housing, Communities and Local Government provide the necessary seed corn as a financial incentive for the strategic authorities to set up their own development corporations?
Secondly, will the MHCLG be drawing up guidance on the governance, funding and delivery of new development corporations? If so, I commend a new report from a distinguished group of architects and planners called Placemaking not Plotting, which provides a helpful basis for the key aspects of urban design to be adopted in place of current poor practice.
Thirdly, are the Government planning to support delivery by these new development corporations with grants or guarantees, perhaps via Homes England, for the initial land purchase on which so much will depend? Any news from the Minister on government support to get these development corporations off the ground would be greatly welcomed. With proper backing from the MHCLG, this component in the Bill, which streamlines the development corporation approach, could revolutionise the quality and quantity of tomorrow’s new homes and communities.
Baroness Armstrong of Hill Top (Lab)
My Lords, first I declare an interest as a recipient of a local government pension. I also congratulate my noble friend; having been a Local Government Minister for four years, I know how difficult any local government legislation is, as is anything that talks about devolution of any sort.
I thought it interesting that the Liberal Benches concentrated on the very local—that is important—but there is also a need for bigger and wider authorities to do the really strategic stuff. I am reminded of the reason that we were able to attract inward investment in the north-east, at one time. It was precisely because of the amassing of land by the Tyne and Wear metropolitan authority, which was then demolished and disbanded by the then Prime Minister Mrs Thatcher, when we lost that strategic organisation in the region. I want to dwell on those more strategic things.
First, and very quickly, I really support the attention given to the transfer of community assets. As many Members know, I am chairing an independent commission on neighbourhoods. I have used most Fridays in the past year to have another look at difficult neighbourhoods. Those which have been working on neighbourhood development have really made a difference when they have been able to use community assets and had more control to use them as income generators too, so that they do not have to wait all the time for the public sector to have enough money to fund their youth work and activities with the elderly, the lonely and so on. I really support the Government for pushing this on both sporting facilities and community assets.
But I mainly want to talk about something that is also in the Bill that, again, I have spoken on in this House before: the need for better accountability and audit of the regional bodies and combined authorities. I know there are Members opposite who celebrate the end of the Audit Commission, but the reality is that that has left significant groups and areas in our society without any effective audit and accountability. In the north-east, we have particularly suffered from this. I know that when the first combined authorities elected their mayors, the then chair of the Public Accounts Committee brought in the—
Lord Gove (Con)
I note carefully what the noble Baroness is saying. I presume that on that basis she deprecates the decision by the current Government to abolish the Office for Local Government, which was established by the previous Government.
Baroness Armstrong of Hill Top (Lab)
I think the noble Lord needs to hear my arguments first and then, when he comes to speak and in Committee, he can challenge them. The reality is that in the north-east we have really suffered. The then chair of the PAC called the newly elected mayors to advise them of the challenges they faced because the normal auditing process was not available to them, and that they would therefore have to make sure that they brought in people who understood the challenge of auditing books for public and private co-operation events and projects.
Some of them took notice. Unfortunately, the Tees Valley mayor did not. Had there been robust arrangements then, we would not have had the difficult circumstances that people in the Tees Valley have faced since. We now have the totally unjustified position of an arrangement having been made behind closed doors, with nobody aware of it, between two individuals and their families—they now live in Dubai, so even the money going to them is not being spent in the region any more—where the 50% public and 50% private benefit from any investment made was changed to 90% private and 10% public. This means that any investment and any return on that investment does not now go to local people; it goes to two developers who now live in Dubai and do not even spend that money locally any more.
We also have the position where land in the Tees Valley is earmarked for the major investment of a data centre. The Government are faced with a data centre they need and the public not being able to get the advantage of that investment. The mayor should rethink and renegotiate. I hope that by introducing the measures in the Bill, the Government will be able to make sure the public in the north-east actually get some benefit from the Government’s investment in that area.
Baroness Shephard of Northwold (Con)
My Lords, we on this side oppose many aspects of the Bill, but that is not because we oppose the principles of devolution and greater local accountability; we strongly support both principles. In 2010, the only area of England with a devolution settlement was Greater London. Since then, Conservative Governments have introduced a number of devolution deals with local authorities, which now cover 64% of England. On this side, we have always believed that local people should be able to hold to account those who deliver local services.
This Bill seeks to standardise and restructure English devolution by creating strategic authorities with mayors across the country. But rather than putting more power into the hands of local people, as my noble friend Lady Scott has said, it gives the Secretary of State significant new powers at the centre—for example, creating new strategic authorities, adding councils to them or providing a mayor—without the consent of local councils. The Government will have the power to force two-tier council areas to become unitary authorities. Five new powers will allow legislation to be amended by statutory instrument without the agreement of local councils.
There will have to be close parliamentary scrutiny of the Bill in this House and in the other place. We need to examine the principles and procedures contained in it because of the great importance, to the whole population, of the services for which the new strategic authorities and mayors will be responsible. As has been briefly mentioned, those services include: transport and infrastructure; skills and employment support; housing, economic development and regeneration; environment and climate change; health and well-being—where social care is I do not know and I hope light may be cast on that—public safety; and the functions of police and crime commissioners. All these are extremely important policy areas that are close to local people.
Obviously, and despite disagreements and misgivings, it has been equally important at local level in the areas with mayoral elections announced for 2026—Norfolk and Suffolk, Essex, Hampshire and Solent—to prepare for the changes to come. Much work has been done. Mayoral candidates have been chosen; they are already campaigning. In some places, staff have been interviewed for the new authorities. Imagine, therefore, the disbelief with which local council leaders received phone calls from the Minister in the other place a few days ago to inform them that the local mayoral elections had been cancelled and would take place in 2028. No one was more shocked than the former Minister for Local Government in the other place, Jim McMahon MP, who said:
“Local leaders across the political spectrum have worked in good faith. They have put aside self-interest and differences, and they did everything asked of them to secure a better settlement for the people they represent. They reasonably expected the Government to do the same … The Government have a moral and a legal obligation to honour their side of the bargain”.—[Official Report, Commons, 4/12/25; cols. 1166-67.]
I agree with those words. Some 5.4 million registered voters live in the areas affected by the changes and Norfolk, where I live, is one of them. In Norfolk, there are fears that the uncertainty caused by the delay will affect investment in large infrastructure projects and stifle growth in the local economy. There is also the question of uncertainty in all the policy areas that will be covered by the new strategic authorities. What are they meant to do? They cannot plan because they do not know what will happen. It is extraordinary.
Why have the Government taken this shock decision to delay the mayoral elections, after all they have said about the importance of devolved powers? They claim that the necessary local government reorganisation is not yet in place. That argument is rejected in all the affected areas. We are certainly 90% there in Norfolk. There have been critics who say that the Government have calculated that they might have more success in the mayoral elections under the new supplementary vote system they intend to introduce for mayors, which is not yet in place. Others claim—I am not claiming this, but there have been headlines—that the Government are running scared, given the current opinion polls. Whatever the reason, many of us in this House value and respect local government. I believe that the Minister does too. I look forward to her reply to this debate.
Lord Goddard of Stockport (LD)
My Lords, as I rise to speak, I am reminded of 15 years ago, when four leaders from Greater Manchester stood outside the Cabinet Office in Whitehall awaiting an invitation in. I was one of those leaders. Greater Manchester had 10 local authorities in 2010: five Labour, three Liberal Democrat and two Conservative. We had already signed up to the first combined authority in the country—a legally binding agreement to serve the people of Greater Manchester—and that was running quite well. We therefore asked the Government for full devolution and full powers, and, more importantly, the funding to go with it.
We presented to the full Cabinet of the Government, including Nick Clegg and the Chancellor of the Exchequer. Four of us sat there, facing them, with two jugs of water and four glasses. We did not expect that. We thought it would be a small number of people. My role was to explain the earn-back model, which was simply that the combined authority would provide, at no cost to government—they quite liked that—the infrastructure for major development schemes: motorway links, transport hubs and many other measures that would then enable development to take place. When successful, the Government would collect the subsequent gross value added tax from the businesses and we would earn a proportion of that tax back to reinvest to create more jobs and opportunities. We were successful, but it took four years to hammer out the financial details of that deal with the Treasury. It was eventually signed off in Manchester by the Chancellor himself, George Osborne, in 2014.
The obvious difference between that devolution deal and the devolution Bill we have today is elected mayors. We did not have elected mayors in those days. We, the 10 leaders, were responsible for our portfolios, directly accountable and directly elected—and that is the problem. We have an elected mayor in Manchester now, Andy Burnham, and he has been outstanding, working collaboratively with combined authorities, putting place before politics, with the first mayoral development corporation not in a Labour-run town but in Liberal Democrat Stockport. It has attracted over £300 million of private investment so far, including thousands of new homes, a fully integrated transport hub, now expanding further across Stockport town centre. Bringing the bus network back under public control was a masterstroke. He is also driving Greater Manchester to be the fastest-growing economy in the UK at present. Having said that, all is not well in Greater Manchester. The private hire cross-boundary issues are of great concern to us. My noble friend Lady Pidgeon, our transport spokesperson, will go into more detail later, but there are more private-hire drivers from Wolverhampton working in Greater Manchester than work in Wolverhampton itself, and that cannot be right.
Mayor Burnham might one day in the future leave us to do greater things in another place and reach higher office. We do not know that. What we do know is that the new Bill gives elected mayors sweeping new powers but is almost silent on democratic accountability. Removing planning powers from directly elected members does not sit well with this group, and future governance arrangements for fire and police will be high on my agenda as this Bill receives the full scrutiny it deserves. As I have said, Greater Manchester has a combined authority. However, there will be strategic authorities, and there must be stronger roles for their council leaders to ensure that potential mayors cannot override the views of three or four constituted local authority leaders. And is it right that the mayor has a casting vote where decision-making is tied? Where is the accountability and the honesty in that?
The Liberal Democrat party is the party of devolution. Talk of “empowerment” in the Bill is frankly laughable. It goes hand in glove with robust scrutiny, accountability and giving citizens the confidence that voting matters, their voices matter and their voices will be heard. That way, you get benefits for all of society, not only a few. If this Government listen and accept reasonable amendments, this Bill could begin to do what we all want: growth, investment, better transport and better qualities for all. But, if it does not, there will be opportunities lost. We delivered in Greater Manchester and continue to do so, because we increased scrutiny, embraced joint accountability and built confidence in the private and public sectors. I hope the Government take heed of that, because this Bill is too important to fail.
Lord Lansley (Con)
My Lords, as noble Lords can see, this is a doorstop of a Bill. I draw attention to my registered interests as chair of the Cambridgeshire and Oxfordshire development forums, and I support development forums in Norfolk, Suffolk and Cheshire as well—but of course anything I say is entirely my own view.
As a former Leader of the House of Commons with responsibility for parliamentary counsel, I draw the House’s attention to the fact that more than two-thirds of this Bill is to be found in its schedules. When parliamentary counsel published their most recent document on the drafting of Bills, they said that technical detail should not interrupt the narrative—the story one is trying to tell in the Bill—but that special attention should be paid to the question of whether material should be relegated to the back of the Bill. Well, virtually everything has been relegated to the back of the Bill. We have something like two dozen clauses that do not tell you what their intention is but simply tell you that there is a schedule to go and look at.
A rather effective example, referencing the interesting speech by the noble Lord, Lord Best, is Homes England. The powers of Homes England in relation to the acquisition of land are to be found in Schedule 16, introduced by Clause 35, but it makes no reference to Homes England; it references only strategic authorities. So the uninitiated reader of the Bill would not find anything about Homes England in its contents at all, yet there are powers provided for it.
I will take only a couple of minutes, because there will be many opportunities in the Bill to take up many of the issues that I know the Minister understands very well. As we finish the Planning and Infrastructure Bill on Wednesday, we will start this Bill with some of the same issues in our minds: neighbourhood planning, how to relate local growth plans to spatial development strategies and, for that matter, what the spatial development strategies of strategic authorities should do in relation to the national land use framework when it is published.
On the principle of the Bill, I share the view that many have expressed that we want to see devolution achieved. I am not sure whether the noble Lord, Lord Wallace of Saltaire, referenced the Localism Act 2011, but the then coalition Government, of which I was very proud to be a member, set us down this important path, which we wanted to see completed. I think our expectation was that, 15 years on, we would probably see devolution across the whole of England and Wales, but it is tough to do.
My own experience is in Cambridgeshire and Peterborough, which is interesting and instructive, because it is not one of the city mayoralties with a metro mayor. From the outset it illustrated the difficulty, because we had parish and town councils—actually, there was no town council in my own constituency, because we had nothing in those days as large as a town. But we had parish councils, a district council, a county council and a combined authority. That was too many, and in principle the Government are right that we should arrive at a simpler structure. If we are going to have a strategic authority, we should have beneath it unitary authorities, to which people can relate, that are responsible for the delivery of the great majority of those local government functions.
At the same time, as these authorities get bigger, we must have effective neighbourhood governance. I am interested that there does not appear to be a schedule that tells us the detail of what effective neighbourhood governance looks like. We just have Clause 60, which tells us that appropriate arrangements should be made for that, but that is something that the Minister in the other place told us would be set out by way of principles in statutory guidance. Well, noble Lords might well find that it would be instructive for us to set out what the principles for effective neighbourhood governance might look like, rather than leaving it to civil servants in the ministry to do so at a later stage.
The only other thing I want to draw attention to is the importance of pace. When we had a devolution priority programme, I thought it was a priority programme because we would get on with it. I declare that I live in Suffolk—we have had contributions already from Norfolk, and we will have at least one more. We thought that we would get on with it, and people in local government thought that we would get on with it and have responded on that basis. It feels a bit like that memorable occasion: being sent to the crease having had one’s bat broken. I am afraid that, after the Bill’s passage through another place, it feels like the Minister—for whom I know we all have the greatest respect—had her bat broken by that decision before she came here to stand at the crease, as it were, to look after the Bill.
I have to say that I am a cynic. My noble friend Lady Shephard talked about this decision and why it might be motivated. It may be to do with this Bill because it will allow those mayoral elections to be conducted under the supplementary vote system in the future, rather than the first past the post system next year. Cynical politics is not what we were looking for in the devolution priority programme; we were looking for the positive politics of devolving decisions to local government and seeing local government take up that mantle. I hope that we can see that principle through in the Bill.
Lord Shipley (LD)
My Lords, I remind the House that I am a vice-president of the Local Government Association and the recipient of a small local government pension. I thank the Minister for introducing the Bill, which I welcome in so far as it sets us off on what will be a long road towards true devolution in England.
The aim of the Bill is to transfer power out of Whitehall, which I strongly welcome. No Government can run England, with its population of 56 million, out of London, yet that is what Westminster and Whitehall try to do. The devolved nations get their block grant, and Ministers in Whitehall manage—indeed, micromanage—England.
However, despite its title, the Bill is not about devolution but decentralisation. Even then, the Bill creates a centralised structure through mayors, who, in practice, will be managed by Whitehall, and in particular by the Treasury, because mayors will be forced to compete against each other for resources. There is also a huge centralising power in mayors having the right to hire commissioners, as opposed to elected councillors, to drive policy and delivery. The terms of these appointments will need challenge in Committee.
Having said that, I want to work with the grain of the Bill, because it represents a start on which we can build. I see it as a staging post to direct elections to combined authorities in the course of time. Time will be needed anyway to build capacity at combined authority level to take on all the extra powers and responsibilities proposed.
I am content with the need for there to be a strategic planning tier, and I welcome local growth plans, but can the Minister confirm that all Whitehall departments are signed up to the Bill? Paragraph 15 of the Explanatory Notes confirms a long list of changes that will be delivered by the Bill, but these can be delivered only if all parts of Whitehall are committed to delivery of the Government’s ambition. Are they?
Will the Bill fix the foundations of local government, as Ministers suggest? I fear that it will not, for the reason that resources to do so are insufficient. We are told that mayors will be able to raise revenue, which is welcome, but in Committee we will need to explore what this really means. Fiscal policy is sadly lacking in the Bill; it is not just about the community infrastructure levy.
In terms of local growth, I hope that in Committee we can examine community banking. I want to see simplification of the regulatory requirements involved in establishing new banks to respond to local communities’ needs for access to banking in the face of branch closures. Such banks could be supported by local authorities in their duty to promote growth. There are many useful examples of success in this field in Germany and the USA that we can draw on.
I am pleased by the proposal to end the first past the post election system for mayors, but why stop there? Do we not need proportional representation across all local government in England to have effective governance?
I welcome the end to upwards-only rent review clauses for commercial leases to help regenerate our high streets, although I accept that we may need to review the detail of that carefully in Committee. I like the principle of micromobility schemes; I like the new health duty to be imposed on all strategic authorities; and I am strongly in favour of proposals for Local Government Pension Scheme funds to help drive growth.
I compliment the Minister and the Government on their proposals on local audit, which are hugely important. They matter because we cannot devolve power successfully if there is no audit system examining proposals and spending commitments alongside decision-making.
I have two negatives. First, I do not understand why culture, creativity and heritage are missing from the Bill. Secondly, it is wrong to enforce an end to the local government committee system. The Government claim:
“The committee system is a less effective form of governance for local authorities”.
I invite the Minister to publish the evidence for that assertion, because I have never seen any.
Finally, can the Minister say more about effective neighbourhood governance structures? It is easy to say but, as previous speakers have said, I fear that this ambition cannot be delivered given the current state of local authority budgets. Does the Minister really think it can?
Lord Bassam of Brighton (Lab)
My Lords, I declare an interest: I chair a seafront development and regeneration board on behalf of Brighton & Hove City Council.
I am delighted to speak in this debate for a number of reasons. First, I enjoy a discussion about local government almost as much as I enjoy watching Brighton & Hove Albion Football Club. Secondly, it is a genuine pleasure to speak on a Bill being fronted by my noble friend Lady Taylor of Stevenage, whom I think we all admire and respect—we enjoy her passion for all things local government. Thirdly, I am a big supporter in principle of both devolution and unitary councils. Indeed, I have been arguing for these probably for the better part of the last 40 years. Like others in your Lordships’ House, I have served on district and unitary councils and was privileged to be successful in arguing for Brighton and Hove to become a unitary back in the 1990s. My experience from back then informs my comments and words of advice to the Government today.
Brighton and Hove was carved out of East Sussex, with the Brighton element, previously an old county borough, and the Hove district. My task as leader was to merge two organisations with different cultures and approaches, and to blend in county services of highways, education, social services, transport, et cetera—no easy task. We got most of the reorganisation right largely because we were well led in our officer core, because we settled the big decisions early and because we established a cabinet-style authority with clear lines of accountability. We also developed a vision for the city and a radical programme of change and service modernisation, behind the mantra of “M&S quality and First Direct banking service enthusiasm”.
Getting it right meant setting effective working structures early in the process. This gave us two and a half years before the authority was set up—the first in a sort of pre-shadow year and the second as a shadow authority. So on 1 April 1997 we hit the ground running. The lesson I took from this was to give authorities time. Do not try to do everything at once. To make unitaries successful, roll them out; do not just impose them. If I were to be critical of the Government’s approach to the combined mayoral authorities and unitaries, it would be on this point.
For understandable reasons, the Government want to crack on with change—they should not. They should pause and think about it, and do as their predecessors did. They should do it gradually and sensitively. Why? So much of a Government’s programme relies on getting councils to deliver, whether it is social care, new housing, stronger environmental programmes, the growth mission, nursery schools, getting people into work, retraining or meeting the challenges of the digital age. We cannot expect councils to do that and more while they are being set up from scratch. Councils that are unfamiliar with each other, having different systems and offering different organisational structures, will need time. We need to make sure that they are well resourced to do it, and we should not expect savings. In my experience, local government reviews rarely ever achieve a net saving.
For me, the Government made a wise decision last week in delaying the creation of the combined mayoral authorities for Essex, Suffolk and Norfolk, Hampshire, and Sussex. The reason why the mayoral model has worked in the mets in Greater Manchester, Merseyside, West Midlands, West Yorkshire and so on is that they were built on a sound unitary council base. The councils need a strategic body for the bigger issues to be resolved. Sadly, that went in the 1980s and had to be reinvented in the last decade or so, and in London back in 1999. Additionally, the issues in Manchester, Merseyside and so on are very different from those in the south and East Anglia. Will the same structure work for Sussex and Hampshire as for South Yorkshire or Greater Manchester? A one-size-fits-all approach may not be best. The Government should use the time that has been provided to pause and think through some of the issues and some of the structures.
Finally, the Bill is strong on empowerment, which I approve of—I think we probably all do. The UK is far too centralised, with some of the biggest regional disparities and inequalities in Europe. We need to do more to help communities, so we should use and develop parish and town councils, let strong neighbourhoods emerge and ensure that they have the resource to run things close to people and places. On place-making, which I know a bit about, we should not create local government structures that people cannot identify with. We should not make the unitaries so big and disparate, with big divides between rural and urban. Place-making will be harder because it will get lost, which I think would be a great shame. The Bill provides us with an opportunity. If we want bottom-up governance with citizens in control, let us use neighbourhood funding as a way of empowering people in their communities.
To finish, I applaud the Government’s commitment, but they should not rush this, otherwise the objectives will get lost amid structures that are dysfunctional. They should not expect big savings, but should place an emphasis on creating renewed local government that is about responsive services based on quality and excellence. That is what the public want; they do not want more cuts and austerity. They want the improvement of the public realm and the higher quality of local service. If this reorganisation and the development of strategic combined mayoral authorities do one thing, they should focus on delivering that.
Baroness Prashar (CB)
My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, for her opening speech. This is a significant Bill and has the potential to reshape the governance landscape of England in a profound and lasting way. The intention of the Bill—to bring decisions closer to communities, strengthen local leadership and enable greater public voice—is one that I support. But if we are to deliver those ambitions, we must ensure that the structures set out here are sufficiently whole, coherent and socially attuned to the challenges that local areas face.
We also need to be mindful that the process of devolution can lead to complex effects on national unity. While it can nurture a sense of identity, it can cultivate a sense of competition, rather than co-operation, and undermine social cohesion. Balancing local devolution with national cohesion is a critical challenge, particularly now when we are grappling with our sense of identity as a country, identity politics are rife and we are witnessing a fraying of social cohesion. The Bill provides an opportunity for deliberative engagement to foster social cohesion and inclusion.
For me, the Bill prompts an important question: what enables people to participate fully in the life of the communities of which they are part? Administrative efficiency alone cannot be the answer, and economic development alone will not do it either. True participation rests on something deeper: the capacity of communities to come together, to build trust, to form relationships across difference and to have shared spaces in which dialogue and collective problem-solving can take place.
We need to look beyond narrow service provision and towards the underlying social and cultural conditions that sustain inclusion. Culture, creativity and heritage are among the principal ways in which people make sense of the world around them. Throughout my work in public life for over five decades, I have seen how vital this can be for intercultural dialogue, which is not just a slogan but an ongoing practice of listening, understanding and negotiating difference. Again and again, it has proved essential for sustaining social cohesion, and it is much more than cultural expression or appreciation. It is a strategic means of enabling people to meet across boundaries, build trust and shape a shared sense of purpose.
As we begin to develop a robust regional tier of governance through the provisions in the Bill, we must ensure that these principles—the ability to communicate across diverse communities, to foster understanding and to strengthen social bonds—are woven into the strategic functions of the new authorities it will create. Without that, devolution risks becoming an administrative exercise rather than a genuinely community-building endeavour.
This is where the Bill, as drafted, is deficient. The area of culture, creativity and heritage has profound significance for social cohesion and civic participation, but it is entirely absent from the list and does not have a place within the statutory architecture. Organisations such as Culture Commons and the RSA have consistently shown how cultural ecosystems underpin community well-being and local agency. There are a lot of local examples; the one I am familiar with is in Southampton. The Southampton model is a culture-led, place-based impact initiative led by Southampton Forward and Southampton City Council. It is a successful model that has focused on unlocking prosperity and delivering impact for people and place. It is akin to the agenda of the Government’s Office for the Impact Economy, which, interestingly, sits within the Cabinet Office, not the Minister’s department.
I am aware that culture, creativity and heritage are often characterised as cut-across issues. But many of the functions already named here are, by their very nature, cross-cutting. Creative industries, seen as an important pillar of the industrial strategy, are sufficiently central to the life and cohesion of a place to merit explicit recognition within the governance structure before us. It is precisely because they sit across so many parts of people’s lives that they should be included purposefully, not by implication, in the strategic remit of the new authorities. Implicit powers are rarely sufficient when multiple departments, funding streams and accountability regimes are involved.
Previous devolution arrangements show that cultural or civic functions are often left orphaned, dependent on discretionary grants or short-term programmes, rather than treated as part of the strategic fabric of our governance. For that reason, culture, creativity and heritage should be included as a defined area of competence, consistent with the other functions named in the Bill.
Culture is not an adornment to governance but part of its foundation. In too many parts of the country, people do not feel heard, connected or part of a shared civic story. If devolution is to succeed, it must help rebuild that sense of belonging and inclusion that sustains social inclusion. The Bill is an opportunity to design a system that supports not only economic co-ordination but the deeper, often more fragile threads of social life: trust, dialogue, identity and belonging. If we neglect those, we risk building institutions that are technically capable but socially brittle.
I hope that the noble Baroness, Lady Taylor of Stevenage, will reflect carefully on these issues and consider whether some measured adjustments can be made to strengthen the long-term sustainability, fairness and cohesion of England’s devolved governance landscape.
Baroness Janke (LD)
My Lords, when I saw the Title of this Bill, I thought that all the long years of deliberation and the many reports produced on the subject of local devolution were about to come to fruition. Experts such as Sir Michael Lyons, Tony Travers and the late Lord Kerslake are among the many luminaries and organisations that have advocated for the fundamental need to bring government closer to the governed. As a long-convinced supporter myself, I hoped that this Bill would empower local people, enabling their participation in matters that directly affect their lives and that they would be able to influence and see how their money was spent and hold directly accountable those who were responsible for governing their local area—an opportunity to address the present democratic deficit.
As the Bill says, we in England have one of the most centralised systems of government in the world, with citizens increasingly disaffected and scornful of those who govern—badly, as people are fond of telling us on their doorsteps—but the overall feeling is that it does not much matter how you vote or what you do as nothing changes. This powerlessness is expressed by many as a reason for not even going out to vote. Anyone who has ever canvassed as a prospective councillor must surely have struggled in trying to explain why people should vote in a local council election while at the same time explaining that local aspirations cannot be met because the Government in Westminster control all the money. Local councillors are bound by the stultifying financial constraints imposed by central government over popular local projects. This tramples on local ambition, demotivating communities and generating widespread cynicism.
The Bill’s Title raised our hopes, only to confound them as we read its woeful contents. Devolution is not the purpose of this Bill; empowering Ministers, not local people, is what we find here. If this Bill passes, the Secretary of State will have unfettered powers to bring about radical changes, such as merging or restructuring councils, without local input or consent and without proper parliamentary scrutiny. That is the opposite of devolution.
The Bill seeks to create a distant elite of so-called strategic councils covering large geographical areas delegating government policy implementation to mayors. They will control these authorities on behalf of central government, supported by unelected members—some might say cronies—who will have real decision-making powers but no accountability. With district councils being abolished, there will not even be the means of holding mayors or authorities to account by the people they will purport to govern. Mayors will answer upward to Whitehall, not to their communities. In many areas, a regional mayor may cover vast, diverse counties and communities with very different priorities. Experience shows that top-down solutions rarely meet local needs.
My noble friend Lord Wallace talked about the regional assemblies. This is another attempt to shoehorn locally diverse areas into large amorphous bodies. I was a member of the South West Regional Assembly, and that august body sought to combine the counties not just of Devon and Cornwall—which would be a challenge on its own—but of Somerset, Wiltshire, Gloucestershire and Bristol into one body. There was basically a huge conflict in that people who were members saw real dissonance between their local interests and priorities and those chosen by the RDAs, who, incidentally, were given most of the powers and the resources. As we have heard from my noble friend Lord Wallace, the referendum in the north-east gave a firm thumbs down to these bodies, with 77.9% against the idea, and the entire policy was abandoned. Therefore, I hope the current Government will look back on what went wrong with those attempts to impose top-down solutions on an unwilling population. They will eventually take their revenge in the ballot box, as we all know and have found out in the past, I am sure.
Furthermore, the Bill ignores the councils that are actually closest to residents: our towns and parishes. These bodies are often the first port of call for communities. Parish and town councils understand the local identity, the civic history and the practical day-to-day realities of where people live. Yet, in this Bill, they are barely mentioned. There is no statutory role for them in the new stretches and no guarantee that larger authorities will have to work with them.
It also should be said here that mayors are not universally popular. In my own city of Bristol, the city mayor was removed as a result of a referendum in 2022. The West of England Combined Authority and mayor are a matter of complete apathy to the local population, with a 30% turnout for the mayoral vote and a complete lack of understanding of what this body is actually intended to do and how it affects local people. So, if this model were to be replicated in our area, it would be considered absolutely derisory by the local people.
I believe that this is a damaging Bill and that it will be deeply unpopular; it smacks of desperation and despotism. The Government are saying that, in the interests of delivering change, they will remove the rights of those who disagree with them; they will create distant bastions of government policy, remove means of dissent and discount the views of local people where they do not coincide with their own. Participation-influenced scrutiny and accountability of government by those who are governed are hard-fought basic rights in any democracy. This Government will ride roughshod over them at its peril.
Lord Porter of Spalding (Con)
My Lords, I am slightly reluctant to follow such a position on the basis that I believe that the Government—if they stick to what they say in the Title of the Bill—are doing the right thing. Unfortunately, like some episodes of “Yes Minister”, this could be a case of “Get the hard bit out of the way” in the Title before you get to the detail.
Most noble Lords have expressed great joy in having the Minister lead this Bill because of her belief in the subject matter, but I hope she is truly in that space. Most Members of this House know that if you were to cut me right through the middle, I would have “localist” written through my core, which is why I stand awkwardly in your Lordships’ House to speak: it is not my natural space. However, I will put my signature to any amendment that anybody tables to make this Bill better. I obviously do not have the brains big enough to actually write any of the amendments that will be necessary to make it work, but I am quite prepared—now that I have mastered my new signature—to put my name to them and support them.
While I am standing, I also draw Members’ attention to the excellent briefing notes from the County Councils Network, which has got a position, and the District Councils’ Network, which has also got a position. Strangely enough, while they agree on some things, they do not agree on the detail nor the positions they agree on. They do agree, however, on constituent members having better scrutiny powers, but they are just not sure on who the constituent members should be. They both take on the hard challenge of accepting that they will disappear in the new world, but they are not agreed on what should replace them.
When we were first introduced to this Bill, we were told that London was going to be in scope, and that the number of councillors on councils would be fair across the whole country. Given that the last council the present Secretary of State ran was a 300,000 unitary, it would be interesting to know his position compared to the previous Secretaries of State on the numbers we should be aiming for. I am not advocating for one number over another, you understand, as the smallest council I have an interest in is 30,000-odd and the largest was a million, so I am quite comfortable someone will come up with the right number anywhere in between.
I have one technical question for the Minister. Where there is a proposition to take some power—not much—from central government and give it to a mayor, does that mean that central government will lose that power? I am thinking particularly about the ability to call in a planning decision from a council. If the mayor can call that decision in, does that denude the Secretary of State of also having that power? If that is the case, is there anywhere we can find it? If it is not the case, is there anywhere we can amend the Bill to make sure that it is the case? That is what devolution should really be about: it should be stripping powers out of Westminster and Whitehall and putting them into the local communities where we all live.
We know that, over about the last 14 years, Whitehall was grown by about a million employees and the town hall was shrunk by about a million employees. So, even in the devolution plan my noble friend Lord Gove saw through—which was the Osborne plan originally—the state centrally has managed to grow and not shrink. If devolution is going to be anything, it should be about a smaller centre and a bigger local. That is what I think most Members of this House would like to see.
Lord Pack (LD)
My Lords, like my colleagues on these Benches, I am a strong supporter of devolution. I was therefore sadly disappointed to see in this Bill the number of areas where power is still to be with Whitehall and not local government, where opportunities for genuine devolution are missed, and where it risks adding to, rather than reducing, the legal complexity faced by local government. I will give brief examples of each and, in doing so, I hope to suggest some areas in which amendments may, in due course, help improve the Bill.
I start with the most fundamental of provisions: people’s right to elect those who govern them. We all recognise that in some exceptional circumstances it can be necessary to delay democracy. For example, I doubt few, if any, in this House would think it was a mistake to delay the general election during the Second World War. However, such delays should be the rare exceptions, at moments of major crisis when safety is at risk. Yet the Bill as it stands will continue the power of a central government, including any future Government of who knows what level of commitment to democracy, to cancel simply by order of the Minister elections that have been previously scheduled. That is far too low a bar. The postponing of democracy should require the full permission of Parliament, through primary legislation. I hope the Minister will say more about why the Government view local democracy as not being worthy of the protection that would come from requiring primary legislation to interfere with it.
I will give two examples of where powers could and should be devolved but are being kept within Whitehall’s grip. Here in this House, we let Members participate remotely. It is a carefully limited right but one that is used and works, whether or not we happen to agree with those remotely-contributed views. Personally, I would make the rules more permissive, but, even as they stand, they are more permissive than those Parliament allows local councils in England. If we think it is okay for us to decide these matters for ourselves, even though there is not the safeguard of elections for people to kick us out if we get it wrong, why should we withhold that right from democratic councils? Indeed, we have seen remote participation used successfully in local government around the UK, both during Covid and since, outside of England. To give credit where it is due, earlier this year the Government made positive noises about introducing new rights for remote participation in English local government, with the proviso of needing to find parliamentary time in due course. Well, here we are in Parliament and we have local government legislation in front of us, and a good chunk of time allocated. I hope the Minister can tell us more about why this opportunity to get on and act, and get this sorted, is not being taken.
Another example of how the Bill still holds so much power tightly at the centre is cattle-grids. For those of us who are collectors of examples of unusual centralisation, the grip of Whitehall on permission to install a new cattle-grid is, in its own way, a famous one. My hopes rose when I saw cattle-grids mentioned in the White Paper. However, looking through the Bill, I see that the decentralisation of those powers does not seem to have made it into the legislation. Indeed, the whole bundle of decentralisation mentioned alongside cattle-grids in the White Paper seems to have been watered down significantly. I hope this is not due to any change of mind by the Government, or to a sudden fear that, if the controlling, centralised hand of the Secretary of State is relaxed, we will have a sudden outbreak of mad cattle-grid disease sweeping the country. I look forward to hearing more from the Minister as to what has happened to those final two sentences in the section of the White Paper on local government taking back control.
On the third area I mentioned—the risks of adding to, rather than reducing, the legal burden on local government and the complexity in the Bill, as touched on earlier by the noble Lord, Lord Lansley—my point is that so much of the legislation passed by Parliament ends up never being commenced. We do all the work to legislate but the law then sits there, with different pieces buried in different places within it, never getting commenced. I appreciate that, for understandable and practical reasons, the commencement provisions in this Bill are not simple, stretching over three full pages. However, the way the commencement of different parts is left open, particularly in Clause 92(7), runs the risk of repeating what has happened to so much previous local government legislation, in that it never gets commenced. I hope the Minister will share where the Government’s thinking is on having a clear cut-off date, so that if parts of this legislation are not otherwise commenced sooner, there is a backstop that catches the remaining items and ensures that the Bill does not become just another addition to that huge sludge of bits and pieces of local government legislation that are passed but never enacted and hang around in limbo.
I hope that, as the Bill progresses, we will see from the Government more willingness to enact genuine devolution. I particularly look forward to hearing from the Minister the Government’s thinking on the right threshold for cancelling elections, why elected councillors should not have the same rights that we hold for ourselves in allowing remote participation in their proceedings, whether the Government are still committed to devolving power over cattle-grids, and what they will do to ensure that, whatever Parliament passes, it really does at some point come into force. If we can get those issues right, the Bill will be very much the better for it.
Lord Fuller (Con)
My Lords, this is the latest legislation in a long line of tinkering that has made our sub-national governance structures more fragmented, complicated, opaque and financially unsustainable. That the opening clauses enumerate 13 types of so-called strategic authority proves that point unambiguously. Such complexity has sown confusion among councils, voters and governments, preferring the wants of the administrative state over the people and taking power further away from residents and business to the dead hand of Marsham Street.
Over 20 years as a councillor, I have seen a mania from officials who live in the London borough bubble to tidy up things outside the M25 for their own bureaucratic convenience. This is just another attempt to lard on half-baked new structures in a half-done settlement that is already unwinding and unravelling before the legislation is even passed. For example, the Budget announced that mayors could raise a new tourism tax, and the Minister lauded that in her opening remarks. Surrey was promised a mayor to do so, but now that has been taken away in the same breath as the cancellation of the mayoral elections. The Bill asks mayors to write growth plans in pursuance of the urgency of driving economic growth. I thought this Government were all about growth and that the mayors were the key to unlocking it—it is clearly not that urgent, given that those mayors have been delayed for two years.
I have heard it all before: let us get rid of the districts and the 86 things that residents value the most, so that it can all be lost in a system where 70% of the money is spent on adult and children’s services, but somehow it will all be all right. It is nonsense. If we were really interested in community empowerment, the Government would sort out a system in which three-quarters of local government expenditure is spent on the 5% of the residents who need social care and those with special educational needs and disabilities. On this, the Bill is silent—another can kicked down the road.
Nowhere in the Bill do the Government set out what local government is for. There are lots of administrative functions listed, but none viewed through the lens that, if it is not foreign policy or defence, it is capable of being done locally. It is not hard to articulate a purpose. Local government exists to raise a family, grow a business, invest in local infrastructure and protect the local environment. On this, the Bill is silent. Instead, we get 380 pages of schedules and impenetrable processes so complex and convoluted that they come round to meet themselves in the opposite direction without working out whether they benefit either the resident or the firm.
As if to prove that point, whole parts of the Bill contain duplicative provisions for mayoral and non-mayoral authorities, with extra discriminations between London and everywhere else in a metropolitan apartheid that is all about shoring up Labour’s electoral heartland at the expense of everyone else. There are more councillors within the M25 than in all the county councils of England. Some 3,108 electors get to choose a councillor in London but in the shire counties it is typically more than 10,000. That is a cynical dilution of democracy.
Schedule 26 is all about reorganisation everywhere apart from London and the mets in Birmingham and Manchester—funny, that. It is nothing less than a gerrymander to save Labour’s councillors in the city while pursuing Labour’s war on the countryside by other means.
The Bill’s title is a confidence trick that promises more structures, not fewer. There will be mayors able to raise unlimited taxes for things they have no control over, new combined authorities with dodgy decision-making provisions, and confusion between tiers. Even smaller-scale powers such as taxi licensing will be transferred up to strategic authorities without the systems, staff or experience to execute them. Proud city councils will be disbanded and relegated to parish council status with unconstrained council tax raising powers.
There will be a vandalisation of our historic county boroughs and cathedral cities, which will lose their identity and civic pride, including their lord mayors, sheriffs and lieutenants. County councils with their pension funds, which the Chancellor wants to control, will be split up. There will be destroying of the districts, which do the things that people value most, with net budgets of only around £10 million to £12 million but which scoop up the most vulnerable people Labour tells us they are most concerned about.
Worse, we now get a new war on the motorist, with new civil enforcement powers for traffic contraventions. This is not a Bill about empowerment; it is about disempowerment and centralisation. It is a disembowelment of local accountability, because part of community empowerment is all about helping people to stand for election, but the Bill actually makes it harder for single mums or community-minded businessmen to stand, with larger councils further away from people and relying more and more on the rich and retired motorist. That is the effect of Labour’s vision for devolution and empowerment: more layers taking powers further away from people while creating a new professionalised councillor class.
I have heard it said that this will save money, but the people who called for this in 2020 now say it will not save a bean. Look at Somerset, bankrupted by an LGR process that is now to be visited elsewhere, and pension strain costs of at least £1 billion, which we know will have to be factored in but have so far not been calculated, to be borne by the local ratepayer. As for the parishes, Salisbury council, for example, was converted from a city to a district, and council tax for a £383 band D is up 44% in four years—a stealth tax if ever there was one.
Fly-tipped right at the end of the Bill are some provisions on investment-sapping commercial rent reviews, as if that improves devolution or community empowerment. It is well-meaning but counterproductive. Let us pin the tail on the donkey: everyone affected will pay more for less. It is all about top down, not bottom up. We should send the Bill back under the Trade Descriptions Act: it is about neither devolution nor community empowerment.
Baroness Griffin of Princethorpe (Lab)
My Lords, I think I have just entered a parallel universe. The real clue to the English Devolution and Community Empowerment Bill lies in its title. While I will touch on structures, my real interest in the Bill centres upon community empowerment. I wholeheartedly welcome the Government’s commitment to devolution, and the Act will be the most significant step forward for a decade. The statement that powers and funding are the floor and not the ceiling of where we want to get to is most welcome.
The newly announced ability for metro mayors to implement the overnight visitor levy is another significant step forward and will help English cities such as Liverpool compete on a more equal footing for international events and visitors.
In my view, there is no one better placed to lead on the Bill than my noble friend the Minister. Having served as the leader of Stevenage Council from 2006 to 2022, she fully understands the complexities of different tiers of local government and is demonstrably committed to effective, devolved local governance and its truly important role in delivering quality public services as close as possible to the needs of local citizens, especially in deprived communities.
Having had the privilege of representing the north-west of England, with a population of 6.8 million and over 40 local authorities—including Stockport—I came from a region of largely unitaries, combined local authorities and city regions. When my mum got ill, I moved back to the West Midlands, where we currently have town, district and county local government. While we have excellent local councillors, many of whom I am proud to call my friends, it has taken me two years, with some experience of having been a local councillor in Liverpool myself, to truly decipher which layer of government is responsible for what.
I truly believe in the role of local government to understand the possibilities of local regeneration and strategic planning; effective landlord licensing schemes; unlocking resources in, for instance, pension schemes, to regenerate local communities and town and city centres; joined-up, affordable, accessible public transport; and, most importantly, understanding that physical regeneration alone does not work, but that it has to be accompanied by innovative training, apprenticeships and lifelong learning, to ensure that local people are equipped to maximise local job opportunities.
It also has to embrace a just transition to ensure that workers are equipped with the skills to move from declining industries to the high-GDP jobs in the emerging industries of the future. Every three year-old girl should be given the creative education to set her on the path to shape her own future. We know where growth is coming from: the creative industries and clean, green energy, for example. Who better to plan for growth than locally accountable strategic authorities?
I firmly believe that Manchester, for instance, is better placed to seize the opportunities for Manchester than Whitehall, and that having only national standards for taxis and private hire cannot work. Bury knows the needs of Bury rather than out of area licensing, which, in my view, should be stopped. There are more taxis licensed in Wolverhampton operating in Manchester than in Wolverhampton. This is potentially dangerous. I also strongly welcome the proposed creation of a strong local audit office to ensure effective delivery of local plans.
In the clean energy Bill in the EU, we proposed local energy communities to enable local people to plan and benefit from the creation and delivery of local energy. However, I say to the Minister that we argued that in order to be effective, these had to be resourced and financed.
My noble friend the Minister knows that a key challenge is how devolving funding and powers to neighbourhoods can really and effectively get local people involved. In my view, this requires resources. Accountability of any resourcing is key. We must also seize this opportunity to achieve the joined-up delivery of public services: politics being done with, not to communities.
We also have to embrace the fact that different areas are at different starting points and may need additional help. We must enable the exchange of good practice and support between regions. Before the Greater Manchester Combined Authority, we had the Association of Greater Manchester Authorities, AGMA, so there was a history of the 10 local authorities working together and cofinancing innovative initiatives in culture, for example. Greater Manchester CA therefore had a head start. No such model existed in Merseyside. I am, however, very proud of how GMCA and Liverpool City Region have worked together to support one another. In resourcing, we have to be cognisant of different starting points and regional differences and needs, especially in rural communities. Having represented Liverpool, European Capital of Culture in 2008, I ask my noble friend the Minister to consider adding culture, creativity and heritage as defined areas of competence.
In strengthening our ties with partners in Europe, the role of elected mayors is key. Carlos Zorrinho, a newly elected mayor in Portugal with a proven track record of delivering digital skills, is working with mayors in the UK. I worked closely with the EU Covenant of Mayors but was acutely aware that while Manchester and Liverpool were prominent, Carlisle was not. How do we achieve a more level playing field? Using the Covenant of Mayors as a convenient consultation tool excluded swathes of my region. How do we achieve consultation that is profound and reaches all areas?
Having a lifelong commitment to local governance, I am delighted to welcome the objectives of the Bill. The question to my noble friend the Minister is how we work to achieve them.
The Earl of Devon (CB)
My Lords, it is a pleasure to follow the noble Baroness, Lady Griffin.
I note my interest as the Earl of Devon and—perhaps unsurprisingly—will speak to the impact of the Bill on that county, where I co-chair the Exeter Partnership, promoting the interface between the city and its rural hinterland. I am a programme board member for the Great South West, and I liaised with Devon County Council and Exeter City Council on their respective—but regrettably conflicting—local government review proposals. I sat on the recent Devon Housing Commission chaired by the noble Lord, Lord Best, and I am a partner in a law firm originating in Devon that practises in many areas impacted by the Bill. I also operate a Devon-based heritage, land and farming business, which interacts with various tiers of local government, not least in licensing, economic development and planning.
Despite so many touchpoints, I am not a politician, so, like the noble Baroness, Lady Griffin, I remain somewhat mystified by the workings of local government and its many levels. I am therefore benefiting immensely from the wisdom of this informed and erudite debate. If I remain ignorant of local government after a decade of involvement, I am concerned about how we educate and inform those who might be less engaged. Many people—the typical local resident; the consumer of local public services who is due to elect their local leadership after the passage of this Bill; the new strategic mayors; and the new unitary local councillors—must be bemused by the complexities of local governance, with its various and changing boundaries and tiers. Perhaps this explains the lack of participation in local authority elections, about which we have heard. Voters simply do not know what they are asked to vote for.
To the extent that the Bill simplifies matters and creates a consistent and level playing field across England, it therefore has my tentative support. But can the Minister outline what plans are in place to provide an education for the nation on the reforms that are taking place, so that we decrease the disenfranchisement that arises from our collective ignorance?
As a feudalist who owes his presence here to the regional autonomy of the south-west during the 13th and 14th centuries, I can only applaud the Government’s efforts to return us to the status quo ante. It is ironic that, as we are banished from Westminster due to our antiquated nature, the Government seek to return to the regionalism that typified the Plantagenet era. That was before the trauma of the Wars of the Roses, which caused the Tudors to centralise authority, thereby creating one of the most centralised countries in the world, which now has some of the highest levels of geographic inequality in Europe.
Historical context aside, given the poverty suffered by once-prosperous rural and coastal communities in the south-west, the peninsula’s best bet for economic and social development stems from greater regional autonomy, so that it can look to its strengths—the traditions of trade, innovation and exploration—to chart a path to a sustainable and better future. I therefore support the broad ambitions of the Bill, but I reserve judgment until I understand how it will impact the south-west. Specifically, what form of strategic authority does His Majesty’s Government foresee for the region? Was Luke Pollard correct when he told the Great South West conference that Cornwall cannot go it alone and must combine with its neighbours to form a strategic mayoralty? That would necessarily mix the cream with the jam, I say with a nod to the noble Lord, Lord Teverson.
Equally, what does local government reorganisation look like for Devon? I understand that the closing date for LGR submissions saw a smorgasbord of proposals from Plymouth, Torbay, Exeter and Devon councils, and maybe more—indicative perhaps of the county’s long-standing tradition of political diversity. How will those different proposals be resolved? Was it really wise to invite existing local governments to propose their own reorganisation, when their response will necessarily be informed by their own political interests? Turkeys rarely vote for Christmas.
Perhaps a more pressing concern is what will happen in the interim while local government is reshaped. Looking specifically at housing and the target of 1.5 million new homes, planning departments surely need to be focused on nothing but delivery. However, with recent amendments to the NPPF and the upheavals due to the Planning and Infrastructure Bill, the landscape for local planning is in great flux. Add to that the promise of wholesale local government reorganisation—some 10 planning authorities in Devon are due to be rationalised to two, three or maybe four unitary authorities—and we can only pity the local departments, which are generally understaffed and overworked and may not even have a job in a few years’ time. The Devon Housing Commission found that one of the major challenges to the delivery of affordable housing was uncertainty in the planning process, and that will only get worse.
Also of concern is the status of rural communities. The Government must be aware of the productivity gap between rural and urban, as well as the terrible poverty that exists, often unnoticed, in rural and coastal communities. As an advocate for the interdependence between rural and urban societies, I believe that we should seek, wherever possible, better integration of the two for the benefit of both. However, there is a danger that the specific challenges of rural communities will be ignored and even exacerbated where they are governed by a leadership that has a predominantly urban interest. The expansion of strategic authority coverage will include large swathes of rural England for the first time, and steps must be taken to ensure that rural residents are protected and able to thrive. There is not a single mention of “rural” in the Bill’s 360 pages, so I invite the Government to consider amendments to establish a rural commissioner as well as duties to consider rural needs.
There are multiple further aspects of the Bill that are of interest, including the environmental and climate change competences. With my tech lawyer hat on, I note that the future-proofing of local private hire vehicles is of some interest, particularly having spent time in California, where Waymo autonomous vehicles are predominant. With my property barrister hat on, I will be interested to understand the policy behind the abolition of upwards-only rent reviews. On assets of community value, I recommend to the House the tireless work of the Plunkett Foundation; I look to forward to sharing with noble Lords its insightful work in this space.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Earl, Lord Devon. I am not sure that I entirely concur with his view of Plantagenet governance, although I note that the Angevin Empire was distinctly a European structure.
I declare my interests as a vice-president of the LGA and of the NALC. I agree with much of what the noble Lord, Lord Wallace of Saltaire, said.
Democracy is at the foundation of Green political philosophy. Democracy means decisions being made locally by the people affected and referred upwards only when absolutely necessary. Despite its thoroughly misleading title, the Bill involves not devolution of power but Westminster directing what should happen in local areas, communities being disempowered by the loss of local representatives, and the imposition of a single “strong leader” model of a mayor, without any deep responsibilities for local engagement. More than that, those mayors will be subject to little local scrutiny and oversight. We heard from the noble Baroness, Lady Armstrong of Hill Top, just how wrongly that can go, through her example of the Teesworks project.
There has been much hand-wringing about the apparent loss of trust, particularly among young people, in democracy. But democracy should be about much more than an election of a single person every four years—and, as we have seen in the postponement of four of next year’s scheduled local mayoral elections, at the whim of the Government in far-off Westminster. Before we give up on democracy, we should try it.
To take one example, I will discuss Clause 59 and Schedule 25, which saw a hard-fought win by Greens and others in the other place. Those provisions will enable Sheffield and other communities—Sheffield is particularly close to my heart, as I was part of the campaign—to allow councils currently operating a committee system to keep it for varying renewable periods. That is great—a concession from Westminster for local power—but why was it necessary to fight so hard to keep local decisions in place, particularly in Sheffield, where a local referendum secured huge community support for this far more democratic model of local governance?
Why are this Government, as with previous ones, so opposed to democracy? Do they not understand what damage centralised control and direction are doing? Do they not understand that 29 councils are already in financial crisis, with a fresh warning today that more will fall into this position after the new funding settlement is announced this month? As the LGA explained today, cost and demand pressures are unrelenting, particularly in children’s and adult social care, homelessness and SEND, all areas where councils are forced, in effect, to be the agents of central government-determined statutory responsibilities. That is not local empowerment but local desperation and rightful anger at the failure of local government to deliver local priorities because it simply does not have the cash.
There is one area of positivity in local government, in town and parish councils, which, under a decade and a half of austerity, have often been forced—sometimes gladly—to pick up many of the responsibilities previously carried out by larger authorities. Many of them have done it extremely well, efficiently and democratically. But there is a problem: it tends to be the more privileged communities with longer histories—a market town, say—that have these structures, while a large, relatively new council or other estate, where representation is most urgently needed, is now further away from it than ever.
There is little time and so much in the Bill, so I will tick off some further issues that I am going to be picking up on Report. On community wealth building, rather than allowing a few to profit while the rest of us pay for privatised and outsourced services, seeing community facilities sold into developers’ hands—so often for luxury apartments, it appears—and lost as community spaces for ever, why does the Bill not take steps to allow an inclusive and democratically owned economy? That is a question for the Minister.
The environment is such a crucial issue for community health and well-being on these islands that are some of the most nature-depleted on this battered planet. I note the extensive briefings received from Peers for the Planet and the Wildlife Trusts, which stress how out of date and how very mid-2000s the Bill and the Government’s approach are.
The 2025 council climate action scorecards found that progress improved by only 5% between 2023 and 2025. We can all see, in the floods, droughts and heatwaves, how much faster we have to go. As the LGA consultation concluded,
“local authorities need statutory duties and powers, sufficient funding, and robust support to lead on climate action”.
I note that more than 500 councillors, including Andy Burnham, have signed an open letter calling for more statutory responsibilities. In Committee I will bring forward amendments, I suspect with others, to seek to address these issues.
To pick up the point made by the noble Earl, Lord Devon, and the Better Planning Coalition, the Bill is urban-focused, as are this Government. Adding rural affairs as an area of competence and, where relevant, providing for a rural affairs commissioner—if we have to have the undemocratic structure of commissioner at all—would certainly aid local democracy and ensure some catering to desperately underconsidered communities.
Finally, and briefly, resilience is a crucial issue in this age of hybrid warfare, climate, nature and health shocks, and the dreadfully fragile for-profit infrastructure on which oligopolistic multinational companies have forced us all to rely. We need to see democracy to build local resilience. The Bill will not deliver that.
Baroness Pidgeon (LD)
My Lords, I also declare that I am a vice-president of the Local Government Association. As a passionate localist, someone who strongly believes in devolving power to the lowest possible level, I was rather excited to hear that there was a devolution White Paper and subsequent Bill. But sadly, as for many of my noble friends, the excitement evaporated pretty quickly. The Bill is not about subsidiarity; it is Whitehall giving out a few goodies but with strings and budgets very much attached and controlled from the centre. This is not devolution in my book.
Compared with other OECD countries, the UK remains one of the most fiscally centralised countries. Data from the OECD’s revenue statistics shows that in recent years, no more than 6% of the UK’s total tax revenue has been raised locally. This is about half the OECD average. Whitehall needs to let go and devolve far more funding and services to local and regional government. Fiscal devolution—as we see in cities and localities around the world—alongside a fairer voting system, would allow local innovation and creativity and would help reset politics. Sadly, these are all absent from the Bill.
I will focus my concerns on a few specific areas. The Bill provides insufficient scrutiny of strategic mayors and authorities. The mayoral model is being rolled out across the country without the strong check and balance that is needed. In the Commons, the Minister said:
“I assure the Cttee we will consider how to strengthen the scrutiny of strategic authorities, because I completely agree that as they acquire more powers, it is right we have accountability and scrutiny frameworks that are robust and fit for purpose, to ensure they are held to account for how they use the powers we confer on them”.—[Official Report, Commons, English Devolution and Community Empowerment Bill Committee, 28/10/25; col. 521.]
Perhaps the Minister could update us on the work to strengthen the scrutiny of these new mayors.
There is also an assumption that London has had devolution through the 1999 Act and the amendment Act—tick, job done—but that is not the case. The reality is that the mayor has been given increasing areas to oversee over many years and now has a budget well over £21 billion. Yet the London Assembly, the other half of the Greater London Authority, has not seen an appropriate increase in its powers, and the Bill proposes even more powers to the mayor.
Having been an assembly member for 16 years, I know at first hand that some additional powers are needed to strengthen the scrutiny of the Mayor of London and partner agencies, and ensure that services are being delivered effectively and efficiently. I therefore ask the Minister: what engagement did the Government have with the London Assembly ahead of the Bill? It is clear that the assembly needs stronger powers, such as a wider power of summons and a change to the threshold for the budget. I will bring forward amendments in Committee to address these concerns.
The other areas to which I wish to draw attention at this stage are related to transport. Over recent years we have seen the explosion in micromobility, e-bikes and scooters, covering our pavements and streets. They are a lifeline for many who use them to get about our cities at pace and convenience but are a nightmare for those with mobility issues or visual impairments or for young families having to negotiate routes around these obstacles dumped all over the pavements. Local authorities are unable to license or manage these bikes or set safety standards for them.
While it is welcome that the Bill covers this area, neither the Bill nor the accompanying guidance includes explicit requirements on mayors or strategic authorities to engage with constituent authorities on the development of micromobility schemes. An upfront duty would ensure that engagement at all stages is robust and covers all instances. I would be interested to hear from the Minister on this matter.
My final issue, which has been raised a number of times, relates to private hire and taxi licensing and regulation. While welcome, the amendment introducing national minimum standards does not go far enough, and it feels as if this issue is being kicked into the long grass.
I have been talking to transport authorities across the country; they are all concerned about out-of-area licensing. This is a safeguarding issue. It was raised by the noble Baroness, Lady Casey, in her June 2025 report on group-based child sexual exploitation, as the Minister mentioned. The noble Baroness, Lady Casey, recommended that the Government
“should take immediate action to put a stop to ‘out of area taxis’”.
Noble Lords might be wondering why this is an issue. Different authorities have different standards in their licensing regimes, and if you want to operate in an area, you should be licensed for that area.
As we have heard several times, in Manchester 49% of drivers are currently licensed in Wolverhampton. This means that Manchester local authorities have no say over the standards of drivers and vehicles in the city, nor the resource and right to carry out inspections. This is a huge safeguarding issue and a loophole that needs closing. Will the Minister work with me and Members across the House to close this dangerous safeguarding gap?
I look forward to working to improve the Bill to ensure local empowerment, genuine devolution and safer transport for all.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to have the opportunity to speak at this stage of the Bill and I welcome the Minister to her place. Just when she thought she was going to have a quiet life, another Bill comes along.
We heard earlier that the purpose of the Bill is to transfer power out of Whitehall by giving local leaders the tools to deliver growth, fix the foundations of local government and empower communities. How precisely will this work in rural communities?
I spoke against the orders for the combined authority and the mayor for York and North Yorkshire and I think that my concerns have been proven right. The noble Baroness, Lady Pinnock, and I shared similar views at the time. The population of North Yorkshire and York combined is 768,000. The area is too big geographically but not big enough numerically to make this worthwhile. For the last five years, I was in the most rural part of the constituency that I represented. If I drove 200 miles in one day, I would barely touch the sides of the constituency. How a mayor is expected to get round, meet people and represent that area is a challenge for anybody and I wish him well.
Baroness McIntosh of Pickering (Con)
It is a him.
I believe that democracy is grass-roots, certainly in rural areas. The building blocks are parish councils, districts, boroughs and counties. It is very confusing. I was three times subject to Boundary Commission reviews in my parliamentary career—once as a European MP and twice as an MP. When we keep meddling and making more mysteries to local government, as we are doing in this Bill, it discourages people from going out to vote, because they do not know which area of government or which authority they are living in. We were promised that, if we got rid of the districts and boroughs in North Yorkshire, we would save money. We then had a metro mayor imposed on us, and most of the rural dwellers stayed at home. Politically, it was not a riotous success for us in North Yorkshire. We lost our overall majority. So it is going to be a challenge as successive elections take place. The lowest turnout was for the police commissioner election—something that was imported from the States. It might work well there, but it certainly did not work well in rural parts of North Yorkshire.
I share common cause with noble Lords who have spoken in favour of rural commissioners. There is a great case for saying that in deeply rural areas we must have a rural commissioner in place. Better still, could we go back to having rural-proofing of all policy across the piece? That would help very much. I look forward to working with the Minister and others in the House when we move to Committee to make the Bill work in this regard.
When it comes to funding, if I have understood correctly, there is going to be a levy for transport. How are the Government going to square the extra responsibilities on combined authorities, particularly when it comes to solar farms and battery storage plants, both of which are highly flammable? If the fire service has to attend to these, it will put an extra call and extra resource implications on them. I would be interested to know how the Government expect to fund this if it cannot be met out of general funding at this time.
There are areas which I support. I support the provisions on out-of-area services. The noble Baroness, Lady Casey, did the House and the country a great service by showing how that was part of how grooming gangs were able to target their victims. It is not just in Wolverhampton and Manchester. There are problems right across North Yorkshire and the north-east. I think there are still problems with Uber and it is right and proper that these services should be brought under the Bill.
I am grateful to Guide Dogs for its briefing. There is still the issue that about 58% of guide dog owners are reportedly turned away by taxi or private hire vehicles, despite this being a criminal offence. Will the Government address this as part of the Bill to make sure that there is a better understanding? I am very proud that it was a Conservative Government under my noble friend Lord Hague who introduced what became the Disability Discrimination Act, which made enormous strides in this field. I hope this issue can be addressed as part of this Bill.
The Bill sounds excellent in theory. How it will be delivered in practice, particularly in rural areas, will be a real challenge. I am a vice-president of the Association of Drainage Authorities. There is a key issue to be addressed of funding drainage boards where they do exist to make sure that they have the means to do their excellent work in keeping us all safe from floods.
I welcome the Bill as it stands but hope to improve it and to reintroduce the agent of change principle, this time successfully.
Lord Ravensdale (CB)
My Lords, I declare my interest as a chief engineer working for AtkinsRéalis and as a director of Peers for the Planet.
I welcome this Bill, but I feel for the Minister. She has just about finished the Herculean task of taking the Planning and Infrastructure Bill and the Renters’ Rights Act through this House. To use the words of the noble Lord, Lord Lansley, this is another doorstop of a Bill for her to take through.
This is a very important Bill on something that many Governments have grappled with over many years. So far, it has been tackled in quite a piecemeal way. There is a real need for that strategic-level approach to complete that process and seize all the benefits of comprehensive devolution across the UK.
I have worked for many years on regional issues in the Midlands. Noble Lords have mentioned many areas of the UK in this evening’s debate, but not yet the Midlands. The Midlands is a great test bed or case study for the issues we are talking about. When I came into Parliament, we had a single combined authority in the Midlands—the West Midlands Combined Authority—but there was nothing across the rest of the region. Where I was, in Derby, in the East Midlands, we looked on the west with a little envy. At the time, Andy Street had huge levels of success in being that voice and in bringing large levels of public and private investment into the West Midlands, while we in the East Midlands were lagging far behind. Now things have moved on. We have the East Midlands Combined County Authority and the Lincolnshire Combined County Authority as well.
There are issues with the way in which this devolution is being approached. I go back to something that the noble Lord, Lord Blunkett, brought out. He made a very perceptive comment on what was then the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill, earlier in the Session, which was looking at Skills England. The noble Lord said that devolution was something we could all get behind as a concept but, in doing so, we create joins and barriers that were not present before, and we have to learn how to get through those barriers that we have created.
From observing a lot of the legislation that has gone through the House in this Session, I have noted many areas where that is a problem. For example, I have talked about skills. The Government’s approach to skills in Skills England has been driven through combined authorities. Even though we now have three combined authorities in the Midlands, more than half the population lives in areas outside a combined authority, so they cannot take the benefits of some of these initiatives.
We have seen the same in the Social Mobility Committee, which has just reported on the approach to social mobility. The Youth Guarantee Trailblazers are being driven through combined authorities. Of course, that will be resolved in time through the Government’s plans but, even when we move to a model of strategic authorities that cover the whole country, we will need to break down those barriers and I suggest that a pan-regional level is the best place to do that: to look at investment into regions, skills, energy and social mobility. These are areas which require this broader, pan-regional approach. So I look forward to working with noble Lords in Committee to think about how we can put more of a broader—perhaps a pan-regional—structure into this, which is something that was brought out strongly in the Government’s White Paper as well.
My second point is that the Bill is surprisingly silent on energy. If we look at the areas of competence in Clause 2, a number of areas are brought out—transport, skills, housing, et cetera—but energy is conspicuous by its absence. There is a need for clarity here on how these strategic authorities are going, for example, to work with Great British Energy, and on the role of regional energy strategic plans and local area energy plans. We will need some discussion in Committee on how energy will be factored into the role of these new strategic authorities.
On the environment as well, we are retreading some of the discussion that we had on the Planning and Infrastructure Bill, but the planning role of these strategic authorities needs to align with the strategic priorities of the country: environment and net zero. This carries on from our earlier discussion. I want to bring back in Committee how the planning system can better align with these strategic priorities to ensure that what gets built by strategic authorities aligns with those goals, and to empower the strategic authorities to deliver on those goals.
To finish, the vision is there. Many of the issues that the country has faced in recent decades can be traced back to that centralisation of power and opportunity. The regions have been left behind—the geographic inequality that the noble Earl, Lord Devon, mentioned—and the way to resolve that is to devolve power and resources and use all that local knowledge to revive the regions and, not least, deliver the Government’s economic growth agenda.
Lord Teverson (LD)
My Lords, I am not going to disappoint the noble Earl, Lord Devon: I will speak about Cornwall, but I will also mention our brothers and sisters in Devon at a certain point.
I start with a serious point. As Members will know, Cornwall is in the far south-west of the United Kingdom: only the Isles of Scilly are further south-west. It is a Celtic nation that is surrounded by the ocean, primarily, and a little bit of the River Tamar as well. It is also an area of the country, together with parts of Devon and the Tamar Valley, that was part of the first industrial revolution, not just in this country but globally, in terms of its extraction of minerals, tin and copper, and international trade with the Phoenicians way back in classical history, and it is a nation that is now looking at providing the nation with the mineral lithium so that, in Somerset, our first and only gigafactory can produce its output with British raw materials. It is also a nation that is surely one of the first sources of quality food and drink and all of that area.
Culturally—culture has been mentioned a great deal in this debate—it is the only part of the realm outside of Ireland, Wales and Scotland that has its own language, Cornish, which is recognised by the Council of Europe through the charter for minority languages and recognised by the Government as well. So it is an important part of the United Kingdom.
Although most of my colleagues here have been very critical of the Government and their proposals at the moment, the one thing I will definitely congratulate them on is Steve Reed’s announcement two weeks ago that Cornwall should have—let me get it exactly right—a “single foundation strategic authority”. That has been very much welcomed through the work of Cornwall’s six Members of Parliament—four Labour and two Liberal Democrat—and indeed the leadership of Cornwall Council under its Liberal Democrat and Independent leadership. So I want to thank the Minister for that move forward and the clarity that there is, and its importance for the people of Cornwall. I should explain that I am not Cornish myself. My family were migrants from Denmark into Suffolk in the 10th century. But residents in Cornwall feel that the personality of the land they live in and its culture are of importance to them, not just to those who were born and have long traditions there.
With those congratulations, my questions to the Minister are the following. First, will all strategic authorities be able to become members of the Council of the Nations and Regions? At the moment, that is quite an exclusive club in terms of authorities and, in the past, Cornwall has been excluded, even though the terms of reference make it sound as if it is for all authorities with “devolved responsibilities”. Clearly, all strategic authorities would have that.
Secondly, Clause 51 allows the established strategic authorities to come back to the Secretary of State and ask for extra powers. We do not want to see a caste system of strategic authorities, which would be very dangerous for the future. Could that ability to ask for further devolution be moved out to all strategic authorities?
I welcome the Secretary of State’s announcement. I am sure my colleagues would hope that a similar thing could be extended elsewhere, but I welcome it for Cornwall. I stress that we are not anti the rest of the south-west at all: we work very closely with other local authorities in the south-west. Although the noble Earl, Lord Devon, may put his clotted cream on his scones before the jam, we do not hold that against our brothers in Devon, even though we have a different culture ourselves.
Lord Bradley (Lab)
My Lords, I rise very briefly to raise a particular issue at this Second Reading debate on a Bill which I am very pleased to support. The issue is the need for legislative change to address out-of-area taxi licensing, which has been raised several times in the debate today. This is part of a campaign led by the Mayor of Greater Manchester, Andy Burnham—who, by the way, is quite popular—and council leaders in the devolved Greater Manchester Authority, entitled “Backing Our Taxis: Local. Licenced. Trusted”, which calls for more local accountability to drive higher taxi standards and stronger public safety, and to safeguard the livelihoods of drivers. As a former chair of the licensing committee on Manchester City Council, I welcome that initiative.
On Report in the other place, as we have heard already today from the Minister, the Government introduced an amendment to the Bill that would provide the Secretary of State for Transport with the power to introduce national minimum standards for the licensing arrangements for drivers, operators and vehicles. This should present a valuable opportunity for greater consistency, improve public confidence and improve support across the sector. However, its success will depend on the reasonableness and appropriateness of these standards and, most importantly, on their implementation and ensuring compliance with them. The Bill does not yet set out what these national standards would be, but this can be further debated as it progresses in this House.
However, while it is very positive that the Government are willing to add taxi and private hire services into the scope of the Bill, a key concern remains, as we have heard on several occasions tonight, that out-of-area operations remain unaddressed. This was particularly highlighted by the noble Baroness, Lady Pidgeon, in her contribution. As the Minister referenced, the National Audit on Group-Based Child Sexual Exploitation and Abuse from the noble Baroness, Lady Casey, highlighted the challenges that out-of-area taxis have presented to local authorities trying to enforce standards to protect children at the risk of child sexual exploitation. As the noble Baroness, Lady Pidgeon, noted, the report recommended that the Government take immediate action to put a stop to out-of-area taxis and bring in more rigorous statutory standards for local authority licensing and regulation of taxi drivers.
The Government accepted the report’s recommendations, including for the Department for Transport to take immediate action to stop out-of-area practices, as we have heard. We have also noted that many licensees operate predominantly outside the district in which they have been licensed. As a resident of Manchester, I see numerous licence plates from Wolverhampton every time I walk into my local village.
Mayor Andy Burnham and Greater Manchester leaders have supported Elsie Blundell MP, who has been championing the out-of-area issue in the other place. She tabled a new clause for an optional “license where you operate” model, which will give mayoral strategic authorities power to require that journeys wholly within their strategic area are fulfilled by locally licensed operators. There may be other options than this proposed amendment, which I am sure we can debate at a later stage, as the Bill progresses.
What is most important today is that there is no clear government stance on advancing the Casey recommendation. I hope that my noble friend the Minister will clarify the Government’s position on this when she responds to the debate, so that we can clearly determine whether further legislative change will be required during the passage of the Bill.
Viscount Trenchard (Con)
My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, for introducing this 371-page Bill. I declare an interest as a deputy lieutenant of Hertfordshire. I am well aware of the high regard in which the Minister is rightly held in our county, across the political spectrum.
Noble Lords may wonder why the Government are pushing for more elected mayors while, at the same time, forcing areas that still operate under a two-tier system to switch to a single-tier system. This move involves dismantling traditional counties and creating new unitary councils. On the one hand, the Government claim that two-tier local governments are bad, because people feel remote from decision-making—hence the push for unitary councils; on the other, they seek to impose new second-tier authorities in the form of strategic mayoral authorities through a top-down approach.
The closest level of local government to communities are town and parish councils, which deserve more attention, especially after the abolition of district councils. If the aim to replace county councils with smaller unitary councils is to bring decision-making closer to communities, why are the Government transferring powers to larger strategic authorities? Moreover, the Bill grants the Secretary of State sweeping powers, including the authority to create new strategic authorities and mayors without local councils’ consent.
I know that the Minister loves Hertfordshire, but I am concerned that the implications of unitarisation and the break-up of counties are not fully understood. The word “unitary” is horrible. I regret the destruction of our historic counties. Philip Larkin wrote in his 1972 poem “Going, Going”:
“And that will be England gone,
The shadows, the meadows, the lanes,
The guildhalls, the carved choirs”.
The guildhalls are going, including the magnificent County Hall in Hertford, where I recently attended a mayor-making ceremony. I wonder what Larkin would say about the ongoing local government reorganisation.
The Minister argues that the identity of traditional counties will not be affected by the move to unitaries. I am far from convinced. As a child, I remember that Sussex was thought of as one county but, after the Local Government Act 1972, even the lord-lieutenant’s and high sheriff’s offices were replaced by appointments for East and West Sussex. The historic counties of England were established by the Normans for administrative purposes. They have also helped to define local culture and identity. Stripped of any relevance to local government, the so-called ceremonial counties will gradually be confined to the history books and lose their practical relevance. If counties such as Wiltshire, Dorset and Buckinghamshire can basically remain as single counties, why cannot Hertfordshire and Essex?
Aside from the significant extra costs involved in setting up a new tier of local government, I am sceptical that there will be any savings from this reorganisation. Many councillors who support it do so for political not administrative reasons. Hertfordshire has been well managed as a county and the old adage—if it ain’t broke, don’t fix it—should apply in this case. The Government seem to lack understanding of the importance of community identity or of the function of history and political geography. I believe that we proceed with this compulsory reorganisation at our peril.
The argument that people do not understand where decisions are made between county and district councils is not a good reason to throw the baby out with the bath-water. The new strategic authorities created by the Bill will control most of the funding and services, such as police, fire, social care and NHS. This means that decisions affecting residents will be taken further away from communities, not closer, as the Government claim. Does the Minister believe that people will understand the complex web of new authorities—CAs, CCAs, SAs, MSAs, FSAs, EMSAs, et cetera? Most people could understand the difference between district and county councils, but the confusion began when districts stopped calling themselves district councils. I suspect that, in the future, people will have much less understanding of where crucial decisions are made.
Councillor Tim Oliver, chair of the County Councils Network, has stated that mayors should not undermine the role of councils but work with them to drive growth, build infrastructure and deliver better local services. However, it is clear that the creation of mayors will significantly diminish the role of councils, which are undergoing expensive and unwanted restructuring at the same time. This has the makings of a disaster, particularly in the absence of strong leadership to manage such a large-scale reorganisation.
A recent headline from the Bishop’s Stortford Independent about the “dog’s dinner” of the plans for new authorities sums up the situation well. The Conservative group at Hertfordshire County Council staged a walkout on 19 November, because it was given no option to vote against all three proposed options for unitary councils. I agree with Councillor Nick Cox of the Green Party, who said that Labour’s plans are
“a coup against local democracy delivered with a smile and a flow chart … We are asked to choose between two, three, or four unitaries. That’s like asking the passengers to vote on the band’s encore when the Titanic is already sinking”.
There is a credible alternative—a single county-wide unitary authority, with as much power devolved to local town and parish councils as possible. Even in districts where the majority of councillors support one of the three proposed options, there is widespread doubt about any savings and concern about the disruption that this will cause to vital services such as social care. Some councillors fear years of chaos as new structures bed in. Anyone who believes that breaking up the county’s £1.7 billion highways deal into smaller contracts will lead to savings is mistaken.
In conclusion, the Government’s plans for local government reorganisation are fraught with risks. They undermine both local identity and efficient governance, and they add unnecessary complexity and costs without delivering any clear benefits. I look forward to working with others to persuade the Government to reconsider their approach before it is too late.
Lord Addington (LD)
My Lords, I speak today with some fear in my soul because, unusually for a Liberal Democrat, I have very little grounding in local government—or, as one of my colleagues said to me, “not yet”. So, fearing that candidate selection with my arm jacked up behind my back will follow, I will say one or two things about the Bill in front of us.
One thing on which I agree with the noble Viscount, Lord Trenchard, is that most people do not understand local government. But I disagree with another. I did a little service for the RFU a few years ago explaining local government planning issues and it was quite clear that most of the people involved did not know the difference between a district council and a county council. They had no knowledge of it, because they were a group of people who were committed to a bit of the public service—in this case sport—and who went training, played, manned their committees and even went to work and had love lives. They did not have time to understand the structure of local government and did not realise that until they bumped into it when something was going wrong and said, “Oh, do we have to do that?” The Local Government Association helped me with that.
We then went and spoke to other sports and—guess what—it was the same there. These local structures, which are often designed on historical county lines, have been there for a long time and have ignored the changes in local government whenever they could, have not spoken to each other because they are doing their own thing in their own time. Local governments, often run on local political structures by local volunteers, have exactly the same problems—they do not meet very often and until something goes wrong. Will the Minister undertake to make sure that, when these local government changes come through, there is an active programme of integrating them with these large voluntary groups across the country? Sports should be one of the first, but it goes through. How do they interact? By local transport. If you do not have a bus stop, you do not have a junior team because they do not have cars. That is a problem you will have when you are explaining to somebody who wants to move their club outside the area to a wonderful new site. The developer who has offered you the sun probably cannot offer you a bus service. All these things have to be explained and integrated. If we are going to make these changes, please can the Minister go in and talk to these groups? That should also catch other cultural groups who should be mentioned in this.
What is the relationship between these bodies and public health? Establishing an exercise habit for reasons other than the fact you are told to by your doctor is a very good way of keeping going. You are also involved in the cultural interactions of a group, which is very good for mental health as well. It is also an informal job market and something that allows you to meet people outside your normal group, which helps understanding. Why do we not help them more? These are self-sustaining groups that are probably struggling to get by. Government, particularly local government, really should be reaching out. Please can we do that? This Bill is an opportunity to start doing this. Try to reach out and find out what is going on. We could expand on this into minute detail, but I am at the edge of absurdity here, so I will stop very soon.
What are the Government going to do to reach voluntary groups? Sporting groups would be a good place to start, but they are not the end of it. How will the changes happen? How will you reach out and change their lives for the better? If you do not, the wall of ignorance that exists—it is not even a wall; it is a pit that you fall into—is there. These bodies do not interact; they have their own politics and agendas. They do not have time to get in touch with yours on a casual basis. You need to form bridges in a regional structure. Even unitary authorities might be a good way to start.
Lord Borwick (Con)
My Lords, I think I might have discovered why Governments of all flavours make their legislation so heavy and long—in the case of this Bill, 371 pages, 93 clauses and 34 schedules. It is to enable any Peer to speak about the one subject they know about at Second Reading. That is very generous, because several clauses are to solve long-term problems in the taxi industry and that is what I want to talk about.
I must first declare my interests. I have been connected with the taxi trade for about 45 years and I own my own wheelchair-accessible licensed taxi. Historically, I was the group CEO of Manganese Bronze Holdings plc, which voluntarily introduced the first production wheelchair-accessible London taxi in 1997.
I want to mention the Disability Discrimination Act 1995. Thirty years ago may seem to the young people in the transport department to be legislative archaeology, but the wonderful Library here has dug out the history of this legislation. Section 32 of the 1995 Act says that the department
“may make regulations … for the purpose of securing that it is possible … for disabled persons … to get into and out of taxis in safety”
and
“to be carried in taxis in safety and in reasonable comfort”.
The Government did not actually make the regulations, and the DDA Act was repealed and replaced by the Equality Act 2010. The same clauses were carried through in Section 160 of that Act, but the same inactivity was carried through too. The House of Lords did post-legislative scrutiny on the Equality Act and disability, and the Liaison Committee did so again in 2021. I think that both said the provision should be commenced without further delay. The Government leaped into action, agreed with the committees, and did nothing. So, I believe that the words in Section 32 are still relevant 30 years later. The department “may make regulations”, but has not bothered to do so, and still disabled people with flat batteries are pushing their wheelchairs uphill.
These words pose an obvious question: why have they not been actioned? Is it because there has not been the time in 30 years to action them? The Conservative Party was in power for 16 years, the Labour Party for 14 years, and the Liberal Democrats in coalition for 5 years. All of them have had the power to do something, but nobody has actually done anything. The blame should be shared among the parties represented here; there is ample obloquy for everyone other than the Cross-Benchers to take their fair share.
This is a shameful history, and it should stop. Essentially, Parliament decided to do something and the department decided not to do it but did not have the courage to repeal the legislation. Thirty years is enough. In those 30 years, the number of people who use wheelchairs has grown enormously as longevity has increased. Indeed, I can point out that all of us have used a wheelchair; it is called a baby buggy, and we are very fortunate if it is only at the beginning of our lives when we use a wheelchair.
The noble Baroness, Lady Brinton, made a speech on 4 March 2022 that impressed me. She mentioned that she had arrived at her local station, Watford, after 11 pm in sleet and snow, and only a very few of the taxis were wheelchair accessible. She had a flat battery, so she had to push her heavy wheelchair because there was not an accessible taxi available. Why did any party in power not do the small work required to get the statutory instrument in place?
I have enormous respect for the Minister the noble Lord, Lord Hendy, who I know is enthusiastic to solve this wheelchair accessibility problem. I ask the Government two questions: has the department already drafted the statutory instrument needed by the previous Section 32? I presume that that was 30 years ago. When can we see it proposed?
On the Bill itself, where there are new clauses on the licensing of taxis and private hire vehicles, I ask: why not set a timetable for these excellent clauses, which I thoroughly support? Why does it say “may” and not “must”? Are we debating a 30-year timetable to get these changes done?
The largest problem in the taxi industry is cross-border hiring, which was mentioned earlier. It was a problem mentioned in the Casey report. If a taxi driver can be caught in a crime and lose his licence but carry on working the same place with a new licence from somewhere else, this change to enlarge licensing areas should be made.
There is clearly something suboptimal about the knowledge in London. Butter boys—the London trade’s name for newly qualified drivers—spend three to five years memorising knowledge which is inherently computable. It can be done better on an iPhone than in a brain, because the answer to the question, “How do I get from the House of Lords to Carey Street?”, changes from day to day, depending on who is digging up which road and then staring at the hole.
There may well be significant problems with the rest of the legislation, but I support the taxi clauses. I will propose amendments to compel the Government to bring forward the inclusion of wheelchair accessibility to taxis—a matter agreed no less than 30 years ago.
Baroness Elliott of Whitburn Bay (Lab)
My Lords, I will reflect on the journey that has led to the Bill before us. English devolution has not arrived all at once; it has been shaped over time by successive Governments of different political parties, each building on what came before—from the championing by the noble Lord, Lord Heseltine, of local leadership in economic regeneration, to my late noble friend Lord Prescott, whose Northern Way set out the economic opportunity of stronger regions, and the noble Lord, Lord O’Neill, who worked with George Osborne to translate that economic logic into the modern mayoral model. Although their contributions were informed by different political traditions, they were bound by a shared belief that this country succeeds when power is closer to the people it serves and reflects their needs and aspirations.
Because of that shared endeavour, the landscape has changed dramatically. Eight years ago, there were no metro mayors in the north. Today, we have nine, representing several different political parties. I welcome the Bill’s ambition, building on that cross-party progress, to standardise and strengthen the powers available to mayors and combined authorities that are made up of council leaders. It offers a clearer framework for how devolution should operate, moves us beyond the ad hoc deal-making of the past, and sets a strong direction for the future: that devolution is not a patchwork experiment but a permanent and essential part of how we govern.
The powers in the Bill over skills, transport, housing, regeneration, health and well-being cover exactly the areas where local leadership can make the biggest difference because, out there in the real world, the challenges people face are not neatly divided into departments but intrinsically connected and overlap varying government departments. That is why decisions taken locally and regionally better reflect need. A lack of affordable housing affects employment, poor transportation limits access to training, and health outcomes are shaped by all of the above. The mayor in my region, Kim McGuinness, is using her formal powers and wider convening role to help address child poverty. She strongly supports the ending of the two-child limit to benefits announced by the Chancellor recently in the Budget.
If we do not give our mayors powers to address all those challenges, we should not be surprised when the same problems persist. The Bill gives them a more complete toolkit, and I hope we continue to build on this as devolution evolves, but tools alone will not get the job done if they do not come with the resources to deliver that change. Too often, mayors with clear mandates have to return to Whitehall to bid or make the case for funding when they want to act. That is neither a good use of their time nor consistent with the spirit of devolution, so I welcome the move towards longer-term, more flexible funding settlements. I hope this becomes the standard across all devolved areas. Fundamentally, if we want accountable mayors who are actually responsible for the destiny of their localities, we must go further by allowing them to raise and retain revenue. That is why I was pleased to hear the Chancellor announce a discretionary visitor levy in last month’s Budget, which I hope will be a first step towards a new era of fiscal devolution.
Ultimately, politics is about achieving outcomes, not changing governmental structures, but should we really be surprised that when decisions are made at a distance from the people they affect, they often lead to worse outcomes? Devolution gives local leaders the ability to act on the priorities that matter to their communities: to create jobs, improve public services and ensure that growth is felt more widely. I support the Bill because it moves us further along that path, and I hope we continue to build on it.
Lord Evans of Guisborough (Con)
My Lords, I start by declaring an interest, in that I am a contributor to the Local Government Pension Scheme. Sadly, I am not able to take any money out of it as yet, but I know that it is in good hands.
I am particularly pleased to follow the contribution by my noble friend Lord Borwick, whose wife, Victoria, I served with on the London Assembly for two terms. She was a wonderful deputy mayor of London and set a very high standard for the rest of us to follow. I particularly agreed with my noble friend’s comments on disabled access to taxis. If he brings forward that amendment, I would be delighted to support it and help it, because it is about time.
I agreed with much of what the noble Lord, Lord Bradley, and the noble Baroness, Lady Pidgeon, had to say about out-of-area licensing. While I was in London, I visited cab drivers and would go out with them to see some of the challenges they faced around London. I was often dismayed to see the number of out-of-area plates from towns around London that were plying in the centre of town, seemingly with no enforcement, even though we knew that the standard they had to pass was far lower than the London cab standard. That was in the days before the noble Baroness, Lady Casey, made her report on the grooming gangs, which makes that type of licensing only even more urgent. I am pleased to see the Government bring that forward.
It is 25 years since the noble Lord, Lord Harris of Haringey, and I arrived at Romney House, just down the road from here, to take up our role as founder members of the London Assembly, which celebrated its 25th anniversary this year. I will confine most of my other comments to London issues, because that is the area I know a bit about. I was pleased to hear the Minister talk about the London-wide licensing strategy, which was added to the Bill at a fairly late stage. I note that, in the other place, Dame Meg Hillier, another former colleague of mine now representing Hackney South and Shoreditch, had some very technical questions to raise about the licensing strategy. I will be interested to see how it develops as the legislation moves forward.
I have some questions about London-wide entertainment and alcohol licensing, largely on the basis of why it is being done, why it was asked for, what the objectives are and how we will be able to judge whether this trial is successful before it is rolled out to the rest of the country. Local communities guard their decisions on licensing fiercely. There needs to be a very obvious benefit for taking them away or making that decision at a higher level further up the ladder.
I join the noble Baroness, Lady Pidgeon, in her comments on the assembly’s powers and, perhaps, improving them. I suspect many people here will not know that there has been no occasion at any time in the 25 years that the assembly has existed when the assembly or its committees have been able to amend or overturn the mayor’s budgets or strategic powers, despite the fact that that power was put into the legislation. That is because those committees and the assembly require a two-thirds majority to do that. Linked with proportional representation, that is almost mathematically impossible.
There has only ever been one term in which that might have happened, which was the second term of Ken Livingstone’s office, when the Labour Party was reduced to seven assembly members, which was not enough to provide a one-third blocking number. On that occasion, a number of deals were done with colleagues in the Green Party: I think the mayor’s conversion to green policies was dragged along partly by the political necessity of having to get his budget through. Perhaps the solution to that is to allow the assembly and its committees to amend the budget by simple majority rather than by a two-thirds majority. An amendment to that effect was introduced by Peter Fortune, the honourable Member in the other place who represents Bromley and Biggin Hill, another former assembly member. I think it was defeated, but we might see it again here.
I also believe that another look at the way the assembly is described in legislation may be overdue. The assembly has been in existence now for 25 years. In that time, the population of London has increased by over 1 million people. That is an increase in the size of the population of London of over 10%. Yet the assembly is still made up of 25 members: it has not grown to reflect that. The reason is that the legislation says that the assembly should be made up of 25 members, so some legislative change is required to enable a boundary review to take place. Perhaps the Minister will consider that, while we are going over London matters. It has been an asymmetric growth in numbers. Two particular constituencies in London—North East, which covers the Lea Valley, and City and East, which covers the Barking Riverside development—have grown much faster than others and therefore the people in those constituencies are possibly underrepresented.
I am indebted to my noble friend Lord Porter, who mentioned “Yes Minister”. There has been a lot of discussion about the title of this legislation. I dug the quote out from the first episode of “Yes Minister”. Sir Humphrey Appleby’s advice to Ministers on drafting legislation was, “Dispose of the difficult bit in the title. It does much less harm there than on the statute books”. I hope that the Minister will be able to reassure us that that is not the case.
Lord Storey (LD)
My Lords, I declare an interest as a vice-president of the Local Government Association. Like my noble friend Lady Pidgeon, when I looked at this Bill, I was excited by the possibilities. I thought, “Here is a real opportunity”. Sadly, I do not think we have seized all the opportunities that we could have done. But maybe, as somebody said, it is a first foot in the door.
I have been a local councillor in Liverpool for 38 years and was leader of the council for eight years. I was reflecting, as various people talked, scribbling and changing things on my notes, on what have been the real changes that I have seen during that time and whether there is such a thing as civic pride. Well, I think there was at the beginning. I felt truly that people were proud of the city. Perhaps they still are. I hope they are, but it is difficult to be proud when finances are constantly being cut. I do not know how Liverpool survived when it lost a third of its budget. Imagine your own family losing a third of your income. With the huge costs of adult social care, special educational needs and school transport, what is left is just about managing to keep statutory services going. There is little left for those things that might help to regenerate civic pride.
It took the Toxteth riot to get the then Prime Minister to come to Liverpool. It took a Liberal Democrat-controlled council to get the Labour Prime Minister, Tony Blair, to come to Liverpool. He came willingly. He came in my first year as leader of the council. He came to a breakfast. He arrived late and Alastair Campbell told me I could not speak because the Prime Minister had to speak and go on to his next engagement. I was not allowing that to happen and we created a good relationship. One of the hallmarks of a successful Government in terms of working with local authorities—this is not in the Bill, of course—is the relationships that are created. I am sorry that the noble Baroness, Lady Armstrong, is not in her place, because she helped us enormously with our cabinet model. Tessa Jowell helped us with winning Capital of Culture, although she remained impartial. The relationships that you have with Ministers are hugely important. Of course, Michael Heseltine almost became a Scouser: he changed his views completely.
In Merseyside now we have a combined authority that, I have to say, is remote from the people. You cannot access that. The cabinet or the group that advises them are all the leaders of the local authorities in Merseyside. And guess what—they are all Labour. Can you, as a citizen, find out what is happening? When it is decided, yes. Can you ask to see an agenda of what is being discussed? No. Can you go to a meeting and petition the meeting? No, you cannot. So, when we talk about devolution and opening up local government, it is not just about structures: it is about people themselves.
The former Deputy Prime Minister, Angela Rayner, at Second Reading of the English Devolution and Community Empowerment Bill in the other place, said:
“I know that I will not achieve our goals unless we fundamentally change the way that our country is run. That means handing power back to where it belongs—to local people”—
Hallelujah. We all agree with that, do we not?
“so that they can make decisions on what really matters to their communities”.—[Official Report, Commons, 2/9/25; col. 180.]
However, this Bill sees power remain at the centre. The Secretary of State will retain sweeping powers to merge authorities and extend functions without local consent or parliamentary oversight.
Place is important to people, whether it be a village, a town or a city. Regional identity is hugely important to people. When it comes to strategic elected mayors who have a real vision for their communities and the energy to drive forward that vision, two names come to mind, both with the same first name: Andy Street in Birmingham and Andy Burnham in Manchester, who are real, visionary champions for their combined authorities. Others have quite frankly been rather dull and not had the vision or the determination, and that is to the detriment of local government.
The Bill needs to ensure that all elected mayors are on equal footing and given the same responsibilities: as the noble Baroness, Lady Scott, said, equal financial security, not the drip, drip, drip of responsibilities and finance favoured by the previous Government. We on these Benches have always believed that decision-making should start at the lowest level, at the grass roots, and not become remote and removed from citizens. Elected mayors must always be accountable, and local government at all levels should be open and accessible to the electorate.
Baroness Maclean of Redditch (Con)
My Lords, a lot of good points have already been made in this debate and it is clear that the principle of devolution is supported across all of our Benches. I have personally seen really good results from devolution in the Midlands, where I have lived for most of my life. There, we have had serious and meaningful devolution that has already delivered real progress under the leadership of former Conservative Mayor of the West Midlands, Sir Andy Street. It is quite telling that people from across this House have mentioned him in particular. The noble Lord, Lord Storey, has just talked about pride, and Andy made us feel proud of our region and my home city of Birmingham for the first time in a very long time. That was truly precious, after a lifetime of being laughed at for being from Birmingham.
Nothing in the Bill, I am afraid, resembles that successful model. Instead, we are presented with a measure that centralises power and concentrates authority in the hands of a few individuals. It sidelines councillors and weakens scrutiny, and I am afraid that, against the backdrop of cancelling mayoral elections, it makes a mockery of the Government’s claim that they want to strengthen democracy.
I shall bring in some concerns that have been raised directly with me by councillors in my former constituency in Redditch and in the county of Worcestershire. These are people who actually deliver services and understand their communities. I pay tribute to them and to everybody else who steps up to serve their local area. As my noble friend Lady McIntosh said, it is far from clear how an area such as Worcestershire will be affected. It is too small a county to be a large strategic authority, but lumping it in with Birmingham or combining it with Herefordshire or Gloucestershire just would not work. It would be a million miles from the wishes of local communities, so I would be grateful to hear from the Minister how Worcestershire, and Redditch specifically, will be affected by the plans to combine those two tiers of government into one authority.
My noble friend Lord Trenchard is right to highlight the deep roots of counties. I am old enough to remember when my hometown of Solihull was kicked out of Warwickshire and put into the West Midlands. That caused everyone to go into a frightful tizzy and to vote against all the local councillors who had done it.
I have also heard concerns expressed about the concentration of power into the hands of a small number of individuals, and that really is a danger. To have good governance, you need a robust group on a committee challenging each other and making sure that alternative points of view are presented. I can see that we are creating a situation where influence can be captured by targeting a handful of individuals. We could find a small number of mayors who could create a cabal distant from the people that they serve, rather than the current model we have of ward councillors deeply embedded in their local areas, living and breathing those day-to-day problems affecting people every day. Without proper checks, a mayor can simply ignore scrutiny panels. There is no equivalent to parliamentary votes. If a mayor just says, “Well, it’s my way or the highway”, what can those local representatives do? Absolutely nothing.
As I am speaking after the noble Lord, Lord Ravensdale, I follow him in talking about the Midlands. I was fortunate enough to work very closely with Sir Andy Street as he started out as the first mayor of that combined authority. The reason he was successful is that he was able to navigate relationships with other local authorities of different political colours. He was able to deliver significant benefits for the region and put that authority on a path to being an outstanding authority, and he did it just through relationship building and developing trust, despite their different political colours. I genuinely do not think it would have worked if the then Conservative Government had just said, “You have to do it this way. We’re dictating from MHCLG”—as it was at that time. That would not have worked; they would all have dug in and refused, as Labour authorities, to work with a Conservative mayor, but Andy Street was able to bring them together and deliver something. The Government would do well to reflect on successful models of devolution that have worked well and delivered benefits for those areas.
Reorganisation, if done properly, could potentially save millions of pounds, and I think the Government are planning to do that. My worry is that any cost saving could get swallowed up into more bureaucracy. I fear, and I think many of us share this concern, that it looks as though the Government are potentially using this to do their favourite thing, which is put up taxes. When I listen to the Government Front Bench, at no time do they say they have the aspiration of lowering council taxes on hard-pressed council taxpayers. They talk instead about more taxes for tourism, which will cost money to administer and collect and might well have the opposite effect to the one that they imagine.
Real devolution means trusting local people, not bypassing them, but the Bill does none of that. Local government, in the words of one of our noble Peers who I was just having a cup of tea with, is one of those things that is boring but really important because it touches the lives of so many people. It is vital that we get this right, and I hope the Minister will take on board the suggestions of noble Lords to improve it throughout its passage.
Baroness Pinnock (LD)
My Lords, as a councillor on Kirklees Council in West Yorkshire, which is a large unitary authority with both a metro mayor and a combined authority, I have both an interest to declare and experience to share.
This has been a great debate to be part of and to listen to, because the passion for local governance and local democratic government has been apparent throughout the afternoon. Many issues have been raised that are important locally, such as cattle grids—who knew?—and taxi and private hire licensing, which is vital for safeguarding. We have heard about different parts of the country, from Cornwall and even Devon to Lincolnshire, Norfolk, the West Midlands and now Yorkshire.
This has been an important debate, but it has had rather a mixed response from various Members across the House. We on the Liberal Democrat Benches are completely in favour of the principle of devolution. It is fundamental to our values, as is community empowerment, which should naturally flow from devolution. Unfortunately, the Bill being debated neither encompasses real devolution nor, unfortunately, empowers communities. We on these Benches will strongly support proposals that enable either or both.
At the heart of the chasm that exists between the Liberal Democrat and the Government’s approach to devolution is an understanding of the essential purpose of local government. Successive Governments have viewed local government as simply a necessary local service delivery function. Perhaps that notion has its beginnings in the statement made by Sir Keith Joseph, when he was a Cabinet Minister in the early Thatcher Government, that local government should outsource all its service delivery, and the council would therefore only need to meet once a year to agree the contracts. Since then, there has been a persistent trend of central government viewing the purpose of local government through that lens.
Nearly 20 years ago, the Lyons report into local government expressed a more positive purpose for local government as being one of place shaping in order to use powers and influence to promote the well-being of a community. Lyons said that that approach was crucial to improving satisfaction through greater local choice and flexibility. It is that wider, more inclusive place-shaping role that we on these Benches support. It follows the long line of great local government reformers and indeed the Localism Act 2011, which introduced the concept of subsidiarity.
It is in that context that Liberal Democrats challenge the basis of the Bill. We support a strategic authority, but it should have greater democratic accountability and not be at the expense of local decisions made locally, where they belong. During this debate, there have been many contributions on Parts 1 and 2 of the Bill, which establish strategic authorities and the role of mayors. Strategic authorities have an important role to play in place shaping, as we have heard, and both Manchester and the West Midlands have been trailblazers in doing that, but what is not acceptable to those of us who cherish local democratic decision-making is the powers given to a single person over a large area with minimal accountability, minimal community engagement and little involvement of elected local councillors.
The Mayor of West Yorkshire, for example, serves 2.5 million people, and the combined authority consists of, in effect, the five council leaders. Under the Bill, the mayor will have very wide powers to determine a strategy for land use, for example, that will have a significant impact on local communities who will have been denied a genuine opportunity to have their voice heard. Where is the community empowerment in that? Where is the local accountability and local democratic decision-making?
My noble friend Lord Pack has rightly criticised the change to the mayoral electoral system. A supplementary vote fails the test of enabling the candidate with the widest support to be elected. Why has this system been chosen when others, which are more effective at ensuring the election of a candidate with the widest support, have been rejected?
A further undermining of transparency is the power the Bill provides for a mayor to appoint up to seven unelected commissioners. As it stands, this enables a mayor to appoint their mates to these roles—as has apparently already happened in some mayoral authorities, including one not far from where I live. At the very least, there need to be requirements in the Bill for an open process of appointment through a selection panel.
The extension of mayoral powers is far remote from the notion of community empowerment. For example, the potential for civil enforcement powers to be undertaken by the mayor removes them from local involvement. Further, the power of a mayor to take a planning decision away from the local planning authority is at complete odds with local democracy. I have read nothing in the Bill that explains how a strategic planning decision will be defined. Perhaps the Minister can explain that.
Part 3 is a further attack on local democracy and accountability as it provides powers to the Secretary of State to merge councils into unitary ones. What is not sufficiently discussed is that the key criteria for a unitary council is to be its population. The number of people will determine the geography of the new unitary councils, not whether places coexist and work well with each other, or whether it is the will of the people. Forced amalgamations fail. The council on which I served is a prime example. Even after 50 years, there are regular heartfelt calls for its abolition, because it forced together the great towns of Huddersfield, Dewsbury and Batley, when they do not have much in common. That is the danger of forcing councils together in this way.
Noble Lords will be pleased to hear that there are elements of the Bill that are welcome, such as the creation of the local audit office. That is a very important move. Since the Audit Commission was abolished, there has been a lack of oversight and guidance for local audit, so I welcome that clause. Clause 58 is important, because it gives a nod towards neighbourhood governance, although there is no clarity about what that might mean. In any case, Clause 58 provides a power for the Secretary of State, for crying out loud, to make the decision on what constitutes a neighbourhood unit.
If we really believe in devolution, neighbourhood governance should be decided by the local council area, not the Secretary of State. If there is one thing that I hope the Minister will help us to change, it is that. That is at the heart of what devolution should be: local people determining what neighbourhood governance should look like and what the area should be, not the Secretary of State, who surely has better things to decide on. That is just one example of a ministerial power to override local decisions, which are unfortunately peppered throughout the Bill.
This is not real devolution. There is no fiscal devolution in the Bill either, which, as many Members have said in their contributions, makes devolution a rather empty promise, given that mayors will probably have to compete for resources from the Treasury.
At its best, local government is greater than the sum of its parts. It is what matters most to the daily lives of people. The plea from these Benches is for the Government to start appreciating the power of vibrant, well-funded local government that enhances the lives of the people who live there and the place in which they live. During the next stages of the Bill, we on these Benches will challenge the Government to look through a local lens and provide real devolution and real community empowerment.
Lord Jamieson (Con)
My Lords, I declare my interest as a councillor in central Bedfordshire and a local government pensioner. I extend my thanks to the Minister for the time that she has given noble Lords today, as well as for the many constructive meetings that she has kindly hosted outside your Lordships’ House. I am likewise grateful to the many organisations and individuals who have written to us all and provided many submissions to and analyses of the Bill.
One question troubles me: what is the true purpose of the Bill? I remain far from certain. Over many years, we have seen a consistent trend of centralisation in the UK. As a councillor and an ex-chair of the LGA, I am a huge advocate of devolution, and I was looking forward to the Bill delivering real devolution. We have heard support across this House for genuine devolution. But—and there is a but—while “Devolution” is in the Bill’s title, as hard as I try, I find very little devolution in the Bill. Yes, the Bill devolves licensing of micro electric vehicles and removes outdated Secretary of State consent for things such as special event notices, the conversion of footpaths to cycle paths, and the construction of cattle-grids. Given our previous discussion on the Planning and Infrastructure Bill, I am pleased to see the partial removal of the need for Secretary of State approval for lane rental schemes. While these are all very helpful, they can hardly be described as real devolution, and would certainly not justify a Bill of this size—well over 300 pages.
In fact, the reality is the reverse, with the Bill seeking to centralise powers in Whitehall. Reading the Bill, there are 43 mentions of “must have regard to”, including regard to guidance from the Secretary of State; 76 mentions of “duty” in relation to local government; and 105 mentions of the “Secretary of State may”. With all this new guidance and new duties that have to be followed, there is no mention of transferring funding for fiscal devolution in relation to, for instance, new duties for health, housing and education. Instead, there is an ability for mayors to increase taxes on hard-working residents, who are already suffering from a £68 billion increase in taxes over the last two Budgets. The Bill clearly risks substantial increases in local taxation from uncapped mayoral precepts that can be used for almost any purpose, no doubt to fulfil new duties and guidance as dictated by Whitehall.
Had the title of the Bill been “local government reorganisation”, this would have been more understandable. The Bill’s focus is on the establishment of mayors and strategic authorities and the transfer to them of powers currently held by existing county, district and borough councils. I ask the Minister: what is the purpose of the reorganisation? In the Bill, it is clearly not about devolving powers from Whitehall.
I will reflect on some comments that were made across the House. The noble Lord, Lord Best, raised development corporations, and I have a lot of sympathy with that, but do we really need mayors to create development corporations? The existing structures could do that. Taxis have been raised by many noble Lords, as has safeguarding—and the alarming statistic on the number of Manchester taxi drivers from Wolverhampton. These issues need to be addressed.
Why is there a delay to the mayoral elections? Why could they not have carried on? The Minister said that these strategic authorities would carry their formation, so why not have a mayor to help that? Also, the issue of town and parish councils is critical, and the Bill is rather reticent on that.
On devolution, there were some interesting quotes. The noble Lord, Lord Wallace of Saltaire, called the Bill “constitutionally incoherent”. My noble friends Lady Shephard and Lord Trenchard spoke eloquently on local democracy and local identity. The noble Lord, Lord Bassam, said the Government should “pause and think” before rolling out. The noble Baroness, Lady Janke, called it a “woeful” Bill. My noble friend Lord Porter made an interesting comment: should we be judging this on how small Whitehall gets? Our suspicion is that it will not get smaller. The noble Lord, Lord Pack, made important comments on commencement, and I ask: why are we having a Bill when many powers that already exist on the statute paper have not been commenced? This should be about local identity, local democracy and real devolution. We should be trusting local people, as my noble friend Lady Maclean said. As the noble Baroness, Lady Pinnock, said, it should be about place-shaping, which is best done at the local level.
I will reiterate the important questions posed by my noble friend Lady Scott regarding cost and economies of scale. Both my noble friend and I have led councils through reorganisation, and we know the difficulties and the upfront costs involved, as well as the need for scale in certain services, such as social care. How will the Government ensure that any projected savings, potentially in the tens of millions, are actually realised and not frittered away by consequent changes? If such savings do materialise, will they be used to ease the burden on local taxpayers, who are already under considerable pressure? In Committee we will wish to probe in detail the areas of competence that the Government seek to shift, and, crucially, the rationale for doing so.
I must also raise what I consider to be a fundamental issue: what powers are actually coming down from government to local government—local councils and mayors? The Minister suggested that future powers will depend on what mayors demand, but how will these demands be made? Who decides which powers are devolved and which remain tightly controlled from the centre? As drafted, there is no clear pathway by which a mayor may secure the genuine authority needed to effect meaningful change—and, as importantly, funding for the services involved. Annual bidding for funds is not the same as having a guaranteed revenue stream against which you can plan. In this regard, the Government already have form, removing the incentive for growth provided by retained business rates, which are set to be removed by a business rates reset. The Bill does not devolve power; it simply rearranges administrative functions through Whitehall diktat.
Devolution has huge potential. Whitehall does not know and cannot implement holistically at the local level. If we as a nation are to address the issues of social care, health, economic growth and inactivity, it cannot be done centrally; it needs to be done by local partners working together at the local level to get the best outcomes for their communities. As we have heard across the House, whether it is Cornwall and Devon—there is a bit of a dispute about cream and scones, but hey—or Kirklees, Yorkshire or elsewhere in the country, they are all different and need to be looked at separately.
I hope that in Committee the Government will provide the clarity that is presently lacking and explain how they intend to bridge the gap between nominal competence and real power. Only then can we properly assess whether this legislation truly serves the interests of local communities or simply strengthens the hand of central government. For these reasons, I fear the Bill does nothing to empower local communities. Instead, it reduces local democracy through government-imposed restructuring, irrespective of local opinion, local geography or local identity—bureaucratic reorganisation that will cost money, distract from housing delivery and offer no evidential basis for improved services. It risks higher costs for residents through the new mayoral precepts, increasing borrowing powers, higher parking charges and the creation of further layers of mayor-appointed officials. Can the Minister assure the House that this will not lead to higher bills for hard-pressed residents while services are disrupted through reorganisation? These are serious concerns and I look forward to returning to them in more detail at the next stage of the Bill.
Baroness Taylor of Stevenage (Lab)
I thank noble Lords from all sides of the House for their excellent contributions. It has been an engaging and constructive debate and, for someone as passionate about devolution and local government as I am, it is heartening to hear that passion echoed around the Chamber. We may have different views on how we do things, but that passion for moving some of the powers and funding that are currently held in this little bit of London to local areas has been echoed today. We all know the pressure that the current system is under. It is not working in many places now, and it certainly is not sustainable for the future. We can see the signs of the system cracking all around us, and we need to move forward with this.
I will answer a couple of points made by the noble Baroness, Lady Scott of Bybrook, and the noble Lord, Lord Jamieson, before I start picking up particular detailed points in the Bill. The noble Baroness spoke about respect for local identity. These proposals have come from local government. We have not devised them in the office—there is no map-drawing going on in Marsham Street. That has been done by local people in their own areas. I will not take any lessons from the Tories, who dithered and delayed on local government review and devolution. They did some devolution, but they left huge areas of the country stranded from the increased powers and funding that some areas have benefited from. That cannot be right, and we need to address that now.
The accountability gap that the noble Baroness, Lady Scott, mentioned is there now; what we are doing is introducing locally elected mayors to provide local accountability for local decision-making. With the powers that will be devolved from Whitehall to those local mayors, they will have a powerful democratic mandate to take decisions on behalf of their residents. With the strong local authorities that will sit alongside them and the neighbourhood governance that will take that accountability to the very local level, this is an empowering Bill in terms of accountability, not the other way around.
The noble Baroness asked about funding. There is £200 billion of funding being devoted to this mayoral project, and that gives areas a real chance to make decisions on their own behalf. There are other powers, which I will come to.
The noble Baroness, Lady Scott, mentioned fiscal stability. Fiscal stability comes from having growth and investment in every part of our country, not just in the bits of it where it is decided that it will be. We will get that fiscal stability only where we are making decisions on growth and investment at local level. It is therefore very important that we take these steps now.
Just briefly on the noble Baroness’s point about adult social care—which is well made; we know that there are huge problems with adult social care—each of the proposals for local government reorganisation contains the area’s ideas of how to do the transformation to adult care services. With that local input and the work that the noble Baroness, Lady Casey, is doing, I think that we have a chance to make a real step forward on adult social care after a long time of waiting for that to happen.
I will endeavour to respond to different points in turn, but I would be happy to discuss topics of interest in detail in advance of Committee. The noble Lord, Lord Shipley, asked an important question about other government departments and how they are reacting to the Bill. I simply point to the huge amount of co-operation that we have had from other government departments on, for example, skills, transport, public health and prevention, policing and the fire service. There has been a great cross-governmental project to work on this. I have some of my fellow Ministers sitting on the Front Bench with me and I know that they will be working in their own departments on how we devolve these powers to the local level.
The noble Lord, Lord Shipley, also asked whether this devolution can really be delivered with local government finances in the state that they are. I very much regret that they are in that state, and we need to move that on. The answer to that question is that we simply cannot deliver the public services that people deserve and the growth that people need to see without making these changes. To the noble Baroness, Lady Bennett, I say that we absolutely understand the pressures: many of us have been very close to those pressures over the years, but we need to move this on now.
I say to the noble Baroness, Lady Janke, that mayors will have powers devolved from Whitehall, not upwards from local government. That is very important. We will have stronger, more sustainable unitary local authorities delivering services to local people. As my noble friend Lady Griffin very articulately pointed out, that will instead create the opportunities and growth that we need to see across our country. Of course, people are worried about change, but I point to the success that we have seen right across mayoral areas already. Those areas that already have mayors are making great strides forward with economic growth, housebuilding, skills, transport and infrastructure.
Let me be clear, particularly to the noble Viscount, Lord Trenchard, who I have spoken to on many occasions at Hertfordshire events as well as in this House, that the historic institutions, such as lords-lieutenant and high sheriffs, remain a fundamental part of local life and will continue to do so.
A number of noble Lords raised issues about the functions of local government. As I said, no one is drawing maps in Whitehall; they are being devised and owned by local people. This place-shaping goes right to the heart of the local government reform that the noble Baroness, Lady Pinnock, referred to. Devolution by default is the principle right at the heart of the Bill. As mayoral authorities grow and get more established, they can request more powers, as we have already seen our colleagues in Manchester and other mayoral authorities doing. The Bill sees our system of devolution move away from an ad hoc and inconsistent model, replaced with a model where it is clear what places can access, when they can access it and under what conditions. Our new system of conferring functions on levels of strategic authority is devolution by default, which will streamline the devolution of functions. All areas can be confident about the functions they will receive and, as the framework deepens over time, they will know that they will have access to the new powers as they are introduced.
I am very grateful for the examples of great local action that we have heard. My noble friend Lady Elliott is right that accountable responsible mayors must have the funding that they need to deliver local outcomes and the right framework to demand further powers when they are ready to take them. The noble Baronesses, Lady Scott, Lady Shephard, Lady Bennett and Lady Maclean, and the noble Lord, Viscount Trenchard, all spoke about issues relating to the establishment and the expansion of functions. The Government have been clear that devolution can deliver growth, unlock investment and deliver the change that the public want to see. That is why we want to see more parts of England benefit from devolution. Our engagement with councils to date has demonstrated that there is real appetite for this devolution across England, and the Bill will streamline the process for establishing new strategic authorities. It is our strong preference for devolution to be locally led.
However—and I hope this addresses some of the points about the powers that we have put into the Bill to deal with issues through ministerial-led routes—there are powers providing those routes to establish or expand strategic authorities or provide a strategic authority with a mayor. I reassure the noble Lord, Lord Storey, and others who have raised this issue that these powers will be used only where no local agreement can be reached, where this cannot be moved forward at a local level. We much prefer this to be done at a local level, and this measure will definitely be a last resort. The powers will be subject to conditions and statutory tests and will not be commenced automatically. Instead, they will be commenced by regulations only when Ministers consider it necessary and we will ensure that Parliament has the opportunity to engage further on this matter.
My noble friend Lord Bassam’s points on pace are noted. I thank him for all the work that he did in Brighton. I agree that we need to establish stable unitary authorities as the foundation for devolution, and I am grateful for his comments.
As it has been mentioned in the debate many times, I will briefly refer to the devolution priority programme mayoral elections. Although we had a Question on it earlier, it is important to reiterate those comments, as they were questioned by the noble Baronesses, Lady Scott and Lady Shephard, and the noble Lord, Lord Wallace. The noble Lord, Lord Lansley, spoke about the importance of pace in the devolution priority programme associated with this, and the noble Lord, Lord Pack, mentioned this as well. Of course, we are committed to this extension of devolution and, for Cumbria, Cheshire and Warrington, the first mayoral elections for the new strategic authorities will take place in 2027, as those local authorities had already requested that that be the date for them. For Norfolk and Suffolk, Greater Essex, Sussex and Brighton, and Hampshire and the Solent, which are all areas that currently have two tiers of local government, we have announced that we are minded to hold the first mayoral elections for those areas in May 2028, because we know mayoral devolution is most successful when mayoral strategic authorities are underpinned by strong unitary councils. Therefore, holding elections for new mayors in 2028 will allow enough time for the reorganisation process to conclude and unitary councils to be well established.
On the issue of why culture and heritage are not included in the competence list—the noble Lord, Lord Shipley, the noble Baroness, Lady Prashar, and my noble friend Lady Griffin mentioned this—the current list of thematic policy areas is deliberately broad and is intended to allow a wide range of activities to fall within the scope of the areas of competence. Many initiatives relating to culture, heritage and tourism would naturally be encompassed within the economic development and regeneration area of competence. Strategic authorities will remain key players in supporting culture and heritage initiatives locally. Many are already using their existing powers to support culture, heritage and tourism.
The noble Baroness, Lady Prashar, raised important points about the ability of local government, confidence in its institutions and how that can drive community cohesion. She is absolutely right to raise that, which is why it is important that these institutions are stable and people have confidence in them. The noble Lord, Lord Ravensdale, mentioned the environment, which is the specific competence of mayors, and energy, which is the subject of new powers over local growth plans and strategic planning.
The issue of the appointment of commissioners was mentioned by the noble Baronesses, Lady Scott and Lady McIntosh, and the noble Lord, Lord Shipley. I think that the noble Lord asked why they are not local government leaders. They can be local government leaders if that is the way that the mayor decides to take this. Local authorities will have critical new functions to undertake. They require representation on national bodies and joint working. It is not realistic to expect a mayor to do all this on their own. That is why mayors will be able to appoint and remunerate commissioners to lead on one of seven areas of competence, helping to increase the capacity in their strategic authorities. The noble Baroness, Lady McIntosh, asked about rural communities in this respect. Mayors can set an expectation that one or all of their commissioners should focus on rural issues. This is rightly a local decision.
The noble Lord, Lord Fuller, and many other noble Peers raised issues around local government funding. We are making good now on long-overdue promises to fundamentally update the outdated funding system and its decades-old data. We are targeting money where it is needed most by properly accounting for local need and equalising local income. We are giving local authorities greater flexibility and certainty as we simplify the more than 30 funding streams that were there when we came into office, worth almost £47 billion through the first multi-year settlement in a decade. Giving local authorities that certainty over funding, and over multi-year settlements, is critical here. We will publish the local authority allocations later in December and they will be subject to consultation and the usual parliamentary process.
On mayoral combined authority precepts, to empower mayors to deliver change in their communities, they need to be able to spend money effectively. Previously, mayors could use their precept only to raise money for mayoral functions. This did not cover some areas vital to growth, such as adult skills provision. The Bill will allow mayors to spend money raised through the mayoral precept across the whole of an authority’s function. The introduction of a precept will need to be approved through the budget voting process within each strategic authority.
On council tax, we are committed to empowering local leaders to drive growth and deliver for their communities, without placing excessive tax burdens on people. We are delivering the long-awaited local government funding reforms and the multi-year settlements, and we are consulting on modernising and improving the administration of council tax, to make the system fairer, more efficient and more transparent. That package builds a more sustainable, accountable and locally empowered system that focuses on the needs of communities.
There has been a broad agreement that local audit reform was needed. I agree with my noble friend Lady Armstrong that audit is essential for public confidence. When the whole-government accounts cannot be cleared because of the issues with local government funding, something has to change. Local audit is vital for ensuring trust and confidence that taxpayers’ money is being used wisely. We have acted decisively to clear the backlog, but significant further reform is needed. Last December, we published a strategy and consultation on measures to outline a road to recovery and set the system up for long-term, sustainable success. The Bill delivers core elements of this strategy, creating a clear statutory remit for the local audit office to oversee and streamline the system. I hope that picks up the points that noble Lords mentioned.
The noble Baronesses, Lady Bennett and Lady Pidgeon, my noble friend Lady Armstrong and the noble Lord, Lord Evans, all mentioned the scrutiny of combined authorities and local public accounts committees. All combined authorities will be required to establish both overview and scrutiny committees, and audit committees. Beyond these structures, the current system of accountability and scrutiny is guided by the English Devolution Accountability Framework and scrutiny protocol. We are reviewing both documents to reflect the changes brought forward by the integrated settlement and the Bill. We recognise that there is scope to further strengthen the system of accountability and scrutiny for mayoral strategic authorities. That is why we committed in the White Paper to exploring models for local public accounts committees and local accounting officers. We are committed to strengthening accountability alongside the strengthened devolution offer, and we will confirm our policy approach in due course.
The noble Baronesses, Lady Scott, Lady Janke, Lady Bennett and Lady McIntosh, and the noble Lord, Lord Wallace, among others, mentioned the important issue of our parish and town councils. The Government value the role that town and parish councils play; they are an important part of local democracy. There are no plans to abolish town and parish councils or to change their powers. Our plans on neighbourhood governance in the Bill are about hardwiring community engagement into local authorities themselves. Parish councils will be an important partner in creating stronger, more responsive neighbourhood governance, as will the whole range of grass-roots groups that support community empowerment. I hope that answers the point raised by the noble Lord, Lord Addington, about community groups and their engagement in this. It is for local authorities to determine whether new parish and town councils are needed, and this is done through the community governance review process.
The noble Baronesses, Lady Scott and Lady Griffin, and the noble Lord, Lord Wallace, raised issues around community empowerment. Of course, communities need power returned to them. We want to empower local leaders so that they can better affect the decisions impacting on their areas. That is why we are giving communities stronger tools to shape the future of their local areas, such as the new community right to buy, to help protect against the loss of cherished local assets. Some 350 of the most deprived communities are receiving funding from the Government. This includes the 75 plan for neighbourhoods areas and 25 new trailblazer areas, which will receive £20 million in funding over the next decade, including the pride in place funding. There is a clear ambition to hardwire that community engagement into this new system.
On the neighbourhood governance plans, the noble Lord, Lord Wallace, talked about removing powers from local areas. It is the opposite of that; we are creating a clear neighbourhood governance system for local authorities to hardwire community engagement and neighbourhood working into their governance. The goal of that neighbourhood governance is to move decision-making closer to residents. Decisions about local communities should be made by people who understand local needs. That is why we are introducing a new requirement for all local authorities to make appropriate arrangements for the effective governance of local neighbourhood areas.
The noble Lord, Lord Fuller, and the noble Earl, Lord Devon, raised issues about rural versus urban. Like the noble Lord, Lord Jamieson, I will not get involved in the cream and jam debate. I am afraid the planning Bill and the English devolution Bill are quite controversial enough for me; I will not get involved in a debate about scones. The Government recognise that neighbourhoods across England are diverse, and that rural and urban communities have different needs and characteristics. Through the review of existing council-led neighbourhood governance models, we are working closely with local authorities and the community sector to understand what works best in different contexts.
The noble Lords, Lord Best and Lord Lansley, raised important issues around mayoral development corporations. I agree with the noble Lord, Lord Best, about the value of the New Towns Taskforce report and Sir Oliver Letwin’s report relating to master planning and development corporations. That is why the Bill extends to all mayors the power to create mayoral development corporations, to drive economic growth and regeneration. Mayoral development corporations will benefit residents by delivering new homes, better transport and economic opportunities, revitalising areas for future generations.
I can see I have run out of time. I am sorry; I knew I would not get through all this, but I will respond in writing to any noble Lords whose questions I did not get to. I will conclude my remarks now. I reiterate my thanks to your Lordships for their engagement with the Bill to this point. I thank the noble Lord, Lord Porter, for raising the issue of the District Councils’ Network and the County Councils Network, which have contributed hugely to the work going forward and to briefing noble Lords.
As the Bill progresses, I am happy to accommodate any requests from noble Lords for meetings or additional briefings wherever helpful. As I have set out earlier today, this ambitious legislation will deliver top to bottom redistribution of power, putting decision-making in the hands of local areas and delivering real change for working people. With this Bill, the Government will deliver on our manifesto commitment to empower local leaders and mayors to unlock growth and opportunities right across our country by making the right decisions for the communities they serve. I look forward to working with your Lordships during the passage of this legislation. I commend the Bill to the House.
Baroness Taylor of Stevenage
That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:
Clauses 1 to 4, Schedule 1, Clauses 5 and 6, Schedule 2, Clauses 7 to 9, Schedule 3, Clauses 10 to 20, Schedule 4, Clauses 21 to 23, Schedule 5, Clause 24, Schedule 6, Clause 25, Schedule 7, Clause 26, Schedule 8, Clauses 27 and 28, Schedule 9, Clauses 29 and 30, Schedule 10, Clause 31, Schedule 11, Clause 32, Schedule 12, Clause 33, Schedules 13 and 14, Clause 34, Schedule 15, Clause 35, Schedule 16, Clause 36, Schedule 17, Clause 37, Schedule 18, Clause 38, Schedule 19, Clause 39, Schedule 20, Clauses 40 to 43, Schedule 21, Clauses 44 to 46, Schedule 22, Clause 47, Schedule 23, Clauses 48 to 50, Schedule 24, Clauses 51 and 52, Schedule 25, Clauses 53 to 57, Schedule 26, Clauses 58 and 59, Schedule 27, Clauses 60 and 61, Schedule 28, Clauses 62 and 63, Schedule 29, Clauses 64 to 73, Schedule 30, Clause 74, Schedule 31, Clause 75, Schedule 32, Clauses 76 to 84, Schedule 33, Clause 85, Schedule 34, Clauses 86 to 93, Title.
Baroness Scott of Bybrook (Con)
I understand that there has been no agreement in the usual channels for the Bill to be committed to a Grand Committee. I put on record that it is very disappointing that the Government have tabled this Motion without the agreement of the usual channels.
Baroness Taylor of Stevenage (Lab)
My Lords, my noble friend the Chief Whip consulted the usual channels in the usual manner. I am also aware that he spoke to some key Peers with an interest in the Bill.
Angiolini Inquiry
(1 day, 6 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Davies of Gower (Con)
My Lords, I am sure I join the whole House in welcoming the publication of the first report of part 2 of the Angiolini Inquiry. It is a report that no one wished would ever be necessary but one that now stands as a bleak and urgent testament to the failures that have left too many women feeling unsafe to go about their daily lives.
We must start by remembering why this inquiry exists: the abhorrent murder of Sarah Everard, a young woman walking home, by a serving police officer, which shattered faith, trust and public confidence—and it particularly hurts me to say that. Her death was not just a tragedy for her family and friends; it exposed deep and systematic rot. We must never forget the human cost: a beloved daughter, sister and friend lost because protections failed. But this report is not solely about one individual; its purpose is far wider. Part 2 was commissioned to examine not just the crime of one man but the broader issues across policing and society, recruitment, vetting, police culture and standards, and the safety of women in public places.
What this report reveals is disturbing and unacceptable. Too many women remain fearful—changing their routes, avoiding dark streets, altering their behaviour—not because of what they do but because of what predatory men might do. The report puts it plainly, stating:
“Somehow, we have simply come to accept that many women do not feel safe walking in their streets”.
That must shock and unsettle every noble Lord, because it should not be normal to adjust one’s life out of fear of violence when walking home. I welcome the Government’s recent commitments—notably the creation of a national centre for violence against women and girls—and the putting of police vetting standards on a statutory footing, so that those with a record of violence against women and girls offences cannot serve in our police service.
These are important steps but, as this report makes clear and as the Statement rightly acknowledged, there is no quick fix. We need consistent, nationwide standards across all forces. We need resourcing, training and cultural change. We need comprehensive and transparent data so that progress, or the lack of it, cannot be hidden. On that note, I hope the Minister can finally give us a date on which the Government will publish their violence against women and girls strategy. In response to that question in the other place, the Safeguarding Minister simply said “very soon”—a phrase that I know the Minister is well acquainted with. Unfortunately, “very soon” has been the answer for quite some time. If the Minister cannot give a date, perhaps he could explain to the House what is taking so long.
Can he also set out whether the strategy will include a clear published timetable for implementation of all Lady Elish’s recommendations? Will it commit to robust data recording, not only of reported crimes but of patterns, follow-up investigations, outcomes and resource allocation across every police force? In honour of Sarah Everard and all victims and survivors of violence against women and girls, this House must act—not tomorrow, not next year, but now.
Baroness Brinton (LD)
My Lords, the three moving statements from the families of Sarah Everard, Zara Aleena and Bibaa Henry and Nicole Smallman must act as a reminder that too little has changed since their murders and, worse, since the inquiry was set up. These four women represent the safety of women in our country.
The Minister’s Statement is sparse; while it is good that the Statement says the Government will act, it is just not yet. I say gently to the opposition spokesperson that not much happened under the previous Government either. This is a difficult issue, and I realise that the detail needs to be sorted, but many of the recommendations in the part 2 report are very clear to most of us who are involved in home affairs issues because we debate them time and again in Questions, debates and legislation. For me, the key issue is that because the violence against women and girls document is not yet published, there appear to be zero commitments from government.
In 2021 the UN survey of over 1,000 women reported that 71% in the UK had experienced some form of sexual harassment in a public space at some point in their lives. One of the key recommendations is number 20,
“Empowering and engaging citizens to take action”.
I will focus on this and some of the softer issues, because they may be harder for a Government to deliver. With great respect to both this Government and the previous Government, changing a culture is difficult and the Home Office cannot change culture on its own.
What ideas are there to create a strong campaign explaining that sexual harassment is not acceptable and should never be normalised, that women should not have to live their lives on high alert the whole time, and that they should not feel guilty because of how they look? These are all key points made in the inquiry report. Whatever this campaign is, it also needs to cover social media and the digital world, given all the work that is happening in your Lordships’ House to try to make sure that bad influences are moderated by sensible behaviour. It covers education, and it involves campaigns with young people and children, and their parents and families. Lady Elish rightly says that this is a society-wide problem; it is, and it is urgent.
Recommendation 22,
“Information and early intervention for men and boys to create a culture of positive masculinity”,
is also essential and equally urgent. In the Crime and Policing Bill, as well as many other pieces of legislation, we are trying to combat the appalling culture that is normalising the sexualisation of young girls and women, pushing boys and men to accept stereotypical roles as dominant partners in a relationship, and violence is often not far away. The Tate brothers have made a fortune by creating an obscene and abnormal online society on which young boys and men are fed without any counternarrative. What do the Government propose to do to begin to remedy this?
The report also recommends designing out crime officers. I remember in the late 1990s, when I was bursar of a Cambridge college, that the Blair Government made clear recommendations to councils about designing out crime. If the Government are going to act on recommendation 18,
“Increased use of police Designing Out Crime Officers in the prevention of sexually motivated crimes against women in public spaces”,
will the Government ensure that local government planning committees must also consider this, and that there will be training for officers and planning committees as to why it is so important?
On data, it is appalling that, after murders and violence against women have received so much attention, data collection remains inconsistent and forces still use different systems. The report notes that the NHS has fared much better, but it has learned the hard way that common systems are critical if problems throughout the country are to be dealt with. Pilots are a typical way that Governments try out new ideas. The report notes institutionally poor sharing of good practice or funding rollout, so money for a pilot dies with the pilot and therefore nothing else will happen because when it is rolled out there is no money for it. I know from stalking and other VAWG issues that police, and other professionals and partners, are often left out of data collection. There is often groupthink over issues, and that needs to be addressed. Lady Elish rightly pointed out that:
“Prevention is the first Peelian principle”,
but it must not only remain within the police. What will the Government do to remedy this problem? Lady Angiolini also says that this must happen immediately. This is a tough ask, but an essential one. She sets out who needs to be involved in seeing the data, including His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services. This is right and it is urgent. Will the Government act on the first part of this recommendation straight away, as she proposes?
Above all, I echo the question asked by the noble Lord, Lord Davies: when will the Government launch their own VAWG strategy? Will they, and the police, not start on any of the recommendations until after that launch or, worse, after the usual consultation? Will all the recommendations be fully and properly funded, because if not, as Lady Elish said so powerfully last week, women are still at risk this Christmas?
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I am grateful to both the noble Lord, Lord Davies of Gower, and the noble Baroness, Lady Brinton, for their comments on the report. I start where they started, with remembering Sarah Everard and her horrific murder, which instigated this inquiry. She and all the other women who have been murdered deserve an effective response from government because she is a daughter, a sister and a friend, and the family demand and want answers. We are in a position to be able to help prevent murders.
Colleagues in the House will know that this a second part of recommendations by Lady Elish, and I thank her and her team for the work they have done on this. Noble Lords will know that part 1 included 13 recommendations—three for government and 10 for police—directed at the Home Office to improve the response to non-contact sexual offences. To date, we are delivering against those 13 recommendations, including measures in the Crime and Policing Bill, which noble Lords are aware of. A number of questions have been asked, but I emphasise again that it is simply not acceptable that women should live in fear of attack by random men in the streets of their own town, for domestic violence to continue and for the attack that led to the murder of Sarah Everard not to be resolved by government.
Colleagues—shadow Ministers and the Liberal Democrat Front Bench—have asked similar questions and I will try respond to those issues. Let me be clear to both the noble Lord and the noble Baroness that the violence against women and girls strategy is being finalised. We will publish it as soon as possible. Last week, for example, the Prime Minister and the Safeguarding Minister held an event with stakeholders, including victims and their families, to discuss the progress on the VAWG strategy. It will deliver a whole-system response. There is a need for us to consult with colleagues in the Department for Transport, the Department of Culture, Media and Sport and the Ministry of Housing, Communities and Local Government to ensure that our public spaces are safe for everyone. I assure both noble Lords that the strategy is to be published shortly; although I cannot give a date today, but it will be published in very short order.
That does not mean that we have to wait for the strategy to act—which goes to a point made by the noble Baroness, Lady Brinton. As the noble Lord, Lord Davies of Gower, acknowledged, the Government have invested £13.1 million to launch the new National Centre for Violence Against Women and Girls and Public Protection, to provide co-ordinated national leadership to improve the public response. Thanks to initiatives and the strong push of my honourable friend Jess Phillips, we have introduced domestic abuse specialists in 999 control rooms, which we are rolling out at the moment. We are also rolling out domestic abuse protection orders and have put in place the strengthening of the management of registered sex offenders. We are also improving the response to stalking. There are measures on that in the Crime and Policing Bill currently before the House.
We intend to take forward reforms to the vetting and misconduct systems, so that those who commit crimes such as violence against women and girls have no place in policing. This is extremely important. As I know the noble Lord, Lord Davies, feels very strongly about, in the forthcoming White Paper, being published very shortly, we will set out a package of reforms to policing to ensure that policing can focus on the crimes that matter to the public and drive out waste and inefficiency. We will also look at how we can build on some of the big operations, such as Operation Soteria and Project Vigilant, which have been funded through the National Centre for Violence Against Women and Girls and in which we have invested over £13.1 million.
The noble Baroness, Lady Brinton, rightly pointed to how we can tackle what I will call “negative masculinity”, which is prevalent and very much encouraged by what I regard as some poisonous online activity. We must ensure we tackle that at root cause. That is why, in advance of the response to part 2 of the inquiry, the Department for Education in England has updated the statutory guidance on RSHE with a focus on helping pupils understand the markers of a healthy relationship and how to navigate online safety.
I am being pressed, rightly, on our response to the recommendations in part 2. I simply say to both noble Lords that we published part 1 of part 2 last week, and we intend to take our time to study the recommendations clearly to make sure we can respond to that, as part of the violence against women and girls strategy, which, as I have said, will come very soon. It is simply not acceptable that, as the inquiry found, one in 20 adults per year is recorded as a perpetrator of violence against women and girls. It is a clear sign that violence against women and girls is a national emergency, which is why this Government have committed to bringing forward the strategy very shortly, to ensure that we set out a road map to halve violence against women and girls over the next 10 years.
It is important that we have an effective strategy. The recommendations of the Angiolini report will be part of how we respond to that, and I very much hope we will be able to do that shortly in our violence against women and girls strategy. We are therefore working hand in hand with Lady Elish’s recommendations. We have responded to part 1 by accepting those 13 recommendations, and we continue to press the police to improve their performance in meeting those recommendations. I hope that very shortly we will be able to bring forward that violence against women and girls strategy and do justice to the memory of Sarah and others who have been murdered.
Lord Bellingham (Con)
My Lords, will the Minister reflect on Wayne Couzens’s application to become an authorised firearms officer? Those assessing and processing his application were not able to assess the information about the alleged 2015 indecent exposure allegation. If they had been able to do that, his application would obviously have been rejected. All in all, the assessment of the suitability of Wayne Couzens was a lot more lax than had he been a member of the public applying for either a shotgun licence or a firearms licence. Will the Minister reflect on this and see whether lessons can be learned from this part of what was a very long-running investigation and a saga that caused an enormous amount of stress and distress? The Minister was quite right to underline that. I compliment him on how he handled this matter and how his department expedited this inquiry. It is an object lesson to other departments, which have put in place non-statutory investigations and inquiries, that this was done thoroughly and at speed and that it commanded a great deal of public confidence.
Lord Hanson of Flint (Lab)
I am grateful to the noble Lord for his comments on how the department handled this inquiry that was initially commissioned by the previous Government. As the sponsoring Minister in the Home Office for inquiries, I have been clear that we need to ensure that we have recommendations, that the inquiry is kept to a budget and that those recommendations come as speedily as possible, so that, as the noble Baroness indicated, they can be implemented as a matter of urgency once the Government have had a chance to assess them. I have met Lady Elish on a number of occasions to discuss the progress of the inquiry—to hear not what she is going to say but how the inquiry has reached its conclusions. I am pleased to say that it is proving an effective way of managing the inquiry.
In the case of Wayne Couzens, vetting clearly failed. It is clear that there are lessons to learn about how police officers are vetted. The Government have brought forward proposals already, and we will continue to work with the National Police Chiefs’ Council and the College of Policing to look at how we can improve vetting, to ensure that the police officers who serve the public have the confidence of the public. We can do that by ensuring that there is a proper vetting system to weed out individuals who have potentially committed offences—in the case of the police officer, Wayne Couzens, that self-evidently happened.
There are lessons to be learned, and we will look at them. We are already working on vetting. It is important that we put the strongest mechanism in place to maintain the integrity of the police force. Quite simply, what happened in the abhorrent case of the murder of Sarah Everard is unacceptable. I do not wish to have a situation whereby other police officers in the force, or joining the force, engage in that type of activity.