Levelling-up and Regeneration Bill

Baroness Hayman of Ullock Excerpts

Committee stage
Monday 22nd May 2023 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

415: Clause 176, page 222, line 14, at end insert—
“(2A) Designations under subsections (1) and (2) may only be made following consultation with the local community.”Member’s explanatory statement
This amendment would require designation of a high street or town centre to be consulted upon.

[Baroness Hayman of Ullock (Lab)]

My Lords, before I start, I thank the noble Lord, Lord Fox, for all his work on the REUL Bill, on behalf of my noble friend Lady Chapman.

Welcome back to the levelling-up Bill. We have a large number of amendments in this first group today. They address vacant high street premises and provide us with an opportunity to consider how best we can address our declining high streets and town centres, so I beg your Lordships’ patience: there is quite a lot to say here. Recent data from the British Retail Consortium shows that shopping centre vacancies are running at nearly 19% and high street vacancies at around 14%. These are significant figures, and communities need the tools to improve the situation. There are clearly a number of reasons why this has been happening, and we cannot ignore the impact of online shopping. That was already a significant area of growth before the pandemic, which of course increased the amount of online shopping that people were doing. Vacant shops are also a symptom of a weak economy, and we have had slow economic growth for more than a decade.

That said, there are things we can do to get vacant shops into use and create the conditions for the growth of community enterprises, social enterprises and co-operatives, all of which are good business models and generally more resilient to global events; this certainly proved to be the case during the pandemic. First, I will look at a number of amendments we have tabled that specifically look at how the high street has declined. Amendment 431 probes the impact of business rates and council tax on the number of vacant high street premises. We know that business rates have become extremely problematic for many retailers and other small businesses on the high street, and we believe it is time for the Government to review business rates. I hope the Bill is an opportunity for the Minister to explore that further than we have so far.

Amendment 432 probes the impact of pedestrianisation on the number of vacant high street premises. How people feel about their high streets when they do not have traffic going up and down them is an area of real interest. Evidence shows that it makes it a nicer place to shop. Maybe if we looked at pedestrianisation within the context of vacancies and business rates, we could see how we could make improvements.

Amendment 433 probes the impact of vacant pubs on high streets. Unfortunately, a lot of public houses are closing and I know from public houses on the main street near where I live that business rates are a major problem in that area. Perhaps we can look at business rates around pubs particularly, because they have had specific challenges during the pandemic.

Amendment 434 is about the impact of access to cash and high street banks. Unfortunately, too many banks have been closing high street branches and often we also lose the cashpoint and the ability for small businesses to manage their finances effectively and efficiently. One of the problems is that banks seem to think that bringing a van and parking it in the supermarket car park every now and again is providing a sufficient service. We do not believe that to be the case; we think we need to look at how we can stop the loss of banks on the high street.

Amendment 435 probes the impact of disparity in costs between online and high street retail. We know that online shopping is having a major effect on our high streets which, again, is why we need to look at business rates. Surely the way to resolve that disparity is to see how it can be ensured that retail on the high street is not put at a disadvantage through business rates, and that online retailers are properly taxed and there is a better balance between the two.

Amendment 436 in the name of my noble friend Lady Taylor of Stevenage looks at how increasing dwell time can support regeneration. Dwell time is how long you actually spend there. We have asked for a Minister to publish a report on how leisure, culture, sport and tourism in town centres can increase dwell time for the purpose of regeneration. For example, if retail is not going to fill every shop unit, how can we use leisure, culture, sport and tourism to do so? How will that encourage more people to come into the town centre and shop more?

Looking specifically at some clauses in this part, Clause 176 sets out the arrangements for local authorities to designate where our town centres and high streets are—in other words, the places that will be in scope for premises to be subject to rental auctions, which come later under Clause 188. This is an important first step in the process. Amendment 415 in the name of my noble friend Lady Taylor of Stevenage would require any designations of high streets or town centres to be consulted upon. This is a pretty modest proposal, we believe. It just means that local communities affected by the designation of high streets and town centres would be consulted. We believe that is the right way forward; nobody knows what is or is not a high street or a town centre. Who knows better than the people who use it and live near it?

Amendment 416 in the name of my noble friend Lady Taylor of Stevenage probes the possibility of new incentives to fill empty shops. This develops that previous amendment further by including consultation with local businesses on possible incentives as to how empty shops can be filled. Again, they will know their local community well and may have some interesting ideas as to how the local situation can be improved.

Amendment 417 allows the local community to apply for a street or an area to be designated as a high street or a town centre. This builds on the previous two by adding a protection to ensure that any local community is empowered to seek that a street or an area of their choosing could be designated as a high street or town centre—in other words, giving the community the right to initiate. We believe that communities should have some say as to where their high streets are.

Amendment 437 in my name defines “local community”. To make Amendments 415 to 417 make sense, Amendment 437 defines what is considered “local” in this regard. We have specified people “in the vicinity” to add in protection from potential outside interference. This is an important point. It is about demonstrating that levelling up should not be something done to communities but is something done with them. As part of that, there need to be protections and powers for our communities; our amendments would ensure that these exist.

I will now turn to what constitutes “vacancy”. My Amendment 419 removes the Henry VIII powers for the Secretary of State to alter the circumstances of vacancy. Amendment 424 removes the Henry VIII power that allows the Secretary of State to add or remove grounds of appeal. In general, though, we think the Government have got this right. According to the Bill, vacant premises must have been vacant for a year or for 366 days in the previous two years. We think this is a sensible balance between detriment to the local community and commercial pressures. Our issue is with subsections (5) and (6). Subsection (5) reads:

“Regulations may amend this section so as to alter the circumstances in which the ‘vacancy condition’ is satisfied in relation to premises”.


Subsection (6) says:

“Those circumstances must relate to the time during which premises are or have been unoccupied”.


So, essentially, Clause 178 legislates for what “vacancy” is, but the Government want to reserve the power to change it later. The arguments for and against Henry VIII powers are well known and I am not going to repeat them again today, but I will say why this part of the Bill is inconsistent with what we think levelling up needs to be.

As we have discussed previously in Committee, levelling up should be about the devolution of resources and power. It should not be about Ministers and officials in Whitehall holding all the cards and making decisions about which town centre or high street will benefit from government investment or involvement. Amendments 419 and 424 seek to remove those Henry VIII powers and give us protection in the future.

My Amendment 421 reduces the period after which an initial letting notice would expire to 28 days. Clause 180 is the first clause in this part of the Bill which provides the detail about how the process is likely to work. It is important that the state does not act in an overbearing way and that there is a balance between private and public interests. Currently, this tilts entirely towards landlords, which can lead to long-running vacant and derelict premises blighting our communities and high streets.

Clause 180 sets out that an initial letting notice will be in force for 10 weeks and that a final letting notice can be served only while the initial notice is in force. Our view is that 10 weeks is too long. If we add on the 14 weeks of the final notice period, that makes it a 24-week process, and if the premises has already been vacant for at least a year, or 366 days in the preceding two years, that is a long period of time for it to be empty. We want the Bill to deliver swift action to bring about the change that people want in their communities, so we do not want to see such a long process. Our amendment seeks to rectify that by specifying a shorter notice period of 28 days. We think that four weeks is enough time for landlords to understand the implications of the notice, to act promptly, and to find new tenants as a last opportunity before that process then kicks into being.

In a similar vein, Amendment 423 would reduce the period before a final letting notice can be issued to two weeks. Clause 183 establishes the final notices. As I have said, these are used when a premises has laid vacant for a year or 366 days over two years and has been served its initial notice but no action has taken place and it is still lying vacant. Obviously, that has a huge impact on the local community. On the face of the Bill, final notice has to take place after eight weeks have elapsed from the serving of the initial notice, but not before the notice itself expires after 10 weeks. As I have just said, we feel that this period is too long. Amendment 423 would allow for the final letting notice to be served after two weeks have passed following the serving of the initial letting notice.

My Amendment 422 would prevent the landlord from transferring the premises between related entities while the initial letting notice is in force. Clause 181(1) prohibits landlords from entering into contracts for the building, other than for the sale of the site, without the consent of the local authority. However, the local authority, as covered in Clause 182, must grant approval, provided that the landlord has agreed a lengthy tenancy that meets the conditions. We welcome that the restrictions aim to prevent landlords from trying to escape their obligations; for example, by entering into a bogus tenancy that includes an immediate break clause. In this case, the new tenant—possibly a friend or family member—might be a tenant for a day, and they could then execute a break clause and vacate the premises, and the clock can restart. It is right that the Government are looking to close these kinds of loopholes. However, the purpose of this amendment is to probe whether the clause still leaves a gap where a landlord might seek to pass ownership of a premises to a friend or family member, or perhaps a related company, in order to establish new ownership and restart the clock, when in reality nothing has changed. The amendment may not be the best way to close such a loophole, but I tabled it for the Minister to consider the matter and see whether a better way could be created.

My Amendment 427 requires the Secretary of State to lay any regulations under this clause before Parliament within 90 days. It reflects our belief that it is important to get as much of the Bill as possible on to the statute book in good time. We support rental auctions so that landlords can use their properties, or other groups can seek to, and we want the powers to have teeth so that they are not easily circumvented and are usable.

My Amendment 429 would exempt from compensation damage that is caused when the authority or its agent needs to force access to a site following the failure to allow such access by the landlord. If Clause 201 is used proactively by local authorities and communities, it will of course mean that it is disruptive: it is meant to be. I have no doubt that there will be cases where some landlords think that the best course of action is to ignore the process entirely, especially if they are based a long way away from the communities where the premises are situated. There have to be powers for the local authority to enter premises, and we fully support that.

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[Baroness Scott of Bybrook (Con)]

We are simplifying the issue of the high street. I have listened a number of times to what has been said about business rates, and I have explained how much the Government are putting in to supporting properties in the high street through the revaluation process, et cetera. The Government provide rate relief to help property owners all the time, but the issue of empty properties in the high street is much more complex than that, so there are a number of things we want to address, and one of them is what we are doing in this Bill.

I was saying that I will write to the noble Baroness, Lady Fox, because I would like some further information from the Department for Transport.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank all noble Lords who have taken part in this debate, which covered an important part of the levelling-up agenda. I am just thinking about the Minister’s comments. A number of times she said that it was not appropriate to accept the amendment at the moment because it pre-empted the findings of the consultation that was going on. I have said this before, but I think it would be helpful if legislation were brought forward after consultation, rather than during or before it, because that consultation could then inform the legislation. It just seems a bit backwards, as if it is around the wrong way.

Also, there are the levelling-up funds, the towns fund and various other funding pots, but they do not necessarily always go to the most needy or provide the long-term support that is needed. It is how we provide that long-term change that is important. Too often there are sticking plasters with bits of pots of money.

Workington is obviously a town near me; I used to be the Member of Parliament for Workington in the other place. An industry report by planning consultancy Marrons showed that Workington was near the bottom of the 360 provincial towns that it looked at. It has had some funding recently, for example from the levelling-up fund, and we are of course grateful for that, but the money is going to be spent on improving key routes, bringing in new cycling routes and building a new café. Well, that is lovely, but it will not solve the fact that Debenhams and Laura Ashley have gone. If people find they do not need to come into the town centre because those key shops have now closed, they are more likely to go somewhere else to shop. We really need to look at this in a much broader way. Again, that is why business rates are so very important and they are one of the main sticking points.

Again, on the issues around corporate landlords and pension funds, I absolutely agree with everything the noble Baroness, Lady Thornhill, said on those. We are pleased that the Government are looking to do something about empty shop units. As an example from where I used to live, two shops next door to each other are owned by the same landlady and have been empty for over 20 years, purely and simply because when her shops failed she did not want to let them out to anybody else. So the fact that the Government are trying to do something about this is important, but it has to be done with the support of local authorities and the local community and it has to be done in a way that genuinely makes a difference. It is also important, as other noble Lords have said, that we do not end up with exploitable loopholes or unintended consequences but do have proper oversight. Having said that, I beg leave to withdraw my amendment.

Amendment 415 withdrawn.

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[Lord Hope of Craighead (CB)]

My Lords, I will speak to Amendment 440A in my name. This amendment is intended to draw attention to a recommendation by the Constitution Committee, of which I am a member, in its report on the Bill. Part 11, of which Clause 207 forms part, gives power to the Secretary of State to make regulations requiring the provision of information on transactions and other dealings in land if the Secretary of State considers

“that the information would be useful”

to identify the owners of the land and those with the right

“to control or influence … the owner of a relevant interest in land”.

Clause 207(1) states that these regulations may also provide for

“the sharing of such information with persons exercising functions of a public nature, for use for the purposes of such functions”.

Clause 207(3), to which my amendment is directed, addresses the risk, which is understandable, that there may be an inaccuracy or omission in the information that is provided, arising from the sharing or publication of this information. It states:

“No civil liability is to arise from the sharing or publication of information under regulations under this section by reason of any inaccuracy or omission in the information as provided further to a requirement imposed under section 204 or 205”.


The question then is: who needs this protection? As the Constitution Committee understood it, the intention of this clause is to give that protection to the persons to whom that information has been provided by the Secretary of State. That is because they are the people who will be required by the regulations to share or publish that information. It is obviously desirable that they should have that protection against civil liability if the information that they have been required to share or publish by reason of these regulations is misleading or inaccurate.

It is on that understanding that the suggestion was made by the committee that Clause 207(3) should be more tightly defined in the interests of legal certainty. The suggestion is that it should make it clear that our understanding is correct. That would be achieved if the words

“as respects those persons to whom the information is provided”

were inserted into the clause. As the clause stands, it might be thought to extend the protection further down the line as the information is shared more widely by persons who are doing this not because they are required to do it by the regulations but for some other reason, which may be unrelated to the regulations themselves. However, if it is the intention that the protection should extend that far, the committee suggests that the wording of this provision should be looked at again to make this clear.

I hope this explanation for the amendment may be helpful. It is intended to assist the Government and make it absolutely plain how far the protection the subsection is intended to give should extend.

[Baroness Hayman of Ullock (Lab)]

My Lords, I have a couple of amendments in this group. We have heard that Part 11 sets out a framework for creating powers to require disclosure of certain relevant information relating to ownership and control of land in England and Wales, including transactional information. Of course, if this is implemented, it is another significant layer of disclosure around land ownership and control in England and Wales, supplementing the information that is currently held or is going to be held in a number of public registries. It appears that the Government’s ultimate goal here is to ensure transparency around land ownership and control in England and Wales. We would support this aim.

My Amendment 440 probes the retrospective application of this section. As drafted, the provisions could require the disclosure of information relating to events prior to the enactment of the Bill. Clause 206(4) says:

“Regulations under section 204 or 205 may relate to things done or arising before the coming into force of this Part”.


This amendment probes the benefits of doing this retrospective application and what the Government are aiming to achieve through this.

My second amendment, Amendment 439, probes how local communities can request land ownership information. It would be really helpful if the Minister could provide a bit more information for us to understand how communities are expected to access this information and how that fits in with the role of the Secretary of State.

I thank the Minister for her thorough introduction to the government amendments. Amendments 438A, 438B, 438C, 438D and so on insert clauses before Clause 204. They

“recast the powers in Part 11 so as to make them exercisable only for stated purposes”.

Do these provisions apply to government agencies, such as Homes England, as well? If conditions are attached, they can get in the way when regeneration schemes are being considered. It would be good to have some clarification on that point.

We would support the noble and learned Lord, Lord Hope of Craighead, in what he is trying to achieve in Amendment 440A. If the Minister could either provide clarification to the noble and learned Lord or look at tightening up the wording, as he suggests, that would be extremely helpful.

[Baroness Scott of Bybrook (Con)]

My Lords, in response to Amendment 439 in the name of the noble Baroness, Lady Hayman of Ullock, I confirm that it will be in the public interest for some of the information that is collected to be published. For example, we intend to publish data on arrangements such as option agreements that developers and others have over land. However, there is some information that we will not be able to publish, so we need to strike the balance between transparency, legitimate privacy, confidentiality and practical or security considerations. Therefore, some information will be shared only

“with persons exercising functions of a public nature, for use for the purposes of such functions”.

At this stage, I want to answer a couple of questions from the noble Baroness, Lady Pinnock. She asked why we need beneficial ownership. We believe that the property market in England and Wales should be fair and transparent. A lack of transparency can make it hard to identify rogue landlords, the owners of empty properties and those liable under the Building Safety Act, and it can leave the market vulnerable to criminal activity. We believe that this will deter individuals from using complex structures to obscure ownership of property, and it will provide criminal offences and sanctions for failure to comply.

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[Lord Thurlow (CB)]

My Lords, I declare my interest as a former chartered surveyor—I was one for some 35 years; I resigned when I left private practice—and my comments now, which will be brief, are entirely my own.

Why do the Government want to interfere with an independent professional body? I do not believe that architects, civil engineers, solicitors, doctors, nurses or any of the other many noble professions have this sword of Damocles hanging above their professional organisations as is proposed here. The noble Baroness, Lady Hayter, and my noble friend Lord Lytton have mentioned the worldwide influence of the RICS. I was slightly involved with it many years ago; it is extensive and has done ground-breaking work across the world in bringing together the numerous different property-related organisations in the advisory field to try to create common standards internationally. This is the stuff of soft power; it has a royal warrant.

I accept that the RICS has had its own internal issues—pretty serious ones—but it instigated robust, independent reviews and accepted all recommendations. Why does His Majesty’s Government want this power? It is inappropriate. As we have heard, the Bill has all the characteristics of a hybrid Bill anyway, so what on earth is this clause doing in the Levelling-up and Regeneration Bill?

[Baroness Hayman of Ullock (Lab)]

My Lords, I start by thanking my noble friend Lady Hayter for her very detailed and clear explanation of the concerns felt by a number of noble Lords about why this clause is in the Bill at all. I thank the noble Earls, Lord Caithness and Lord Lytton, for their very detailed knowledge and perspective from their professional point of view; that was extremely helpful and I think this is a very important debate.

I added my name to the clause stand part notice because we are also extremely concerned by the wording of Clause 213 as currently drafted. As we have heard, it provides a power for the Secretary of State to instigate a review of RICS at any time and with very few limits in terms of scope, rationale or process. At the same time, it fails to set out any related statutory protections for RICS or for the chartered surveying profession more broadly. Our concerns stem from the fact that this seems a very significant step for a Government to take—to actually create powers to instigate reviews of an independent, member-funded institution, which does not itself, as we heard, exercise any statutory powers. Noble Lords have said they are concerned that this could risk creating a perception of RICS’s inability to act independently and in the public interest. As the noble Earl, Lord Lytton, said, it has nothing to do with either levelling up or regeneration and could set a highly unusual precedent for any other royal chartered body in the future.

We have heard about the independent review by the noble Lord, Lord Bichard, and the previous review mentioned by my noble friend. She went into the detail of what the independent reviews have said. Also, recommendation 14 of the report by the noble Lord, Lord Bichard, required an independent review of RICS to take place every five years. My noble friend said that it has agreed to do that even more frequently, every three years, so I do not really understand what the Government’s concerns are. It strikes me that, despite the concerns the noble Earl, Lord Lytton, laid out about recent issues within RICS, it has taken concerns raised extremely seriously, has accepted the recommendations in this report and is amending the RICS charter and by-laws to reflect the recommendations in full, subject to the approval of the Privy Council.

So my first question to the Minister is: why do the Government feel the need to interfere in this process? RICS itself, having accepted the recommendations in the review, is looking to ensure that it is held accountable in a transparent, orderly and appropriate manner, so I genuinely do not understand why the Government feel they need to legislate, as other noble Lords have said. It would be extremely helpful if the Minister could properly explain.

I also found it very concerning to hear from my noble friend Lady Hayter that there do not seem to have been any recent meetings between RICS and the Government. Can the Minister confirm that and explain what meetings have been held to discuss this and when? It does seem quite an extraordinary step. We support either the removal or the amendment of this clause so that it aligns with the wording of recommendation 14 of the review of the noble Lord, Lord Bichard, if it is going to stay in here. Surely the regulation of professions should be overseen by independent governance and decision-making that uphold the public interest and also guard against any risk of improper interference. Can the Minister explain why this clause is in the Bill? Will he also comment on the suggestion of hybridity, because this is extremely concerning?

[Earl Howe (Con)]

My Lords, I am grateful for the discussions my noble friend Lady Scott and I have had with the noble Baroness, Lady Hayter, and the noble Earl, Lord Lytton, prior to this debate. I appreciate that they and others have hesitations and reservations around this clause; however, I hope I can persuade the Committee that those reservations should not be given weight.

The Government consider that Clause 213 should remain in the Bill because retaining the Secretary of State’s power in legislation to initiate reviews demonstrates that the Government are committed to supporting RICS in regaining and retaining its reputation after some very serious public failings in 2018-19. The clause also gives the Secretary of State discretion to set specific matters for the independent reviewer to consider that are connected to its governance and effectiveness. The noble Baroness, Lady Hayter, said that there was no rationale for this. The provision is to ensure that a review could specifically include issues that become a public concern, such as providing leadership to the market for the benefit of consumers, rather than always seeking to satisfy members.

The noble Baroness, Lady Hayter, indicated that she viewed the clause as interfering with an independent, free-standing institution. The noble Earl, Lord Lytton, made a similar point. While the clause clarifies the Secretary of State’s power to initiate a review, it would create no power to intervene in the workings of RICS, so I disagree with the premise that Clause 213 interferes with the independence of RICS. Indeed, the clause is clear in clarifying the independence of any proposed reviewer and, with regard to the review itself, mandates only the remit and a requirement to publish, and not, for instance, how the review is undertaken.

I point out to the noble Earl, Lord Lytton, that the power conferred by the clause is strictly limited. The Secretary of State would be required by the clause to publish the independent reviewer’s report but, as he mentioned, the Government are not legislating to act on the review’s outcomes or the independent reviewer’s report, because we cannot, as he said, pre-empt any findings or recommendations. Should the Government require any legislative powers to enact any of the recommendations from a review, we will need to return to Parliament for permission. Once again, this approach will ensure RICS’s ability to operate independently from government while strengthening its accountability to Parliament. The noble Earl asked whether any report would be made directly to the Department for Levelling Up, Housing and Communities. The answer is no: the report would be independent and the Secretary of State is simply required to publish it.

The noble Baroness, Lady Hayter, said that there would be no reason for the Secretary of State to establish an inquiry under the terms of this clause. RICS is uniquely influential across construction sectors and their links with financial service markets. It is the sole body for bestowing chartered surveyor status in the UK and its reputation took a big hit as a result of the failings of 2018-19, which, given its unique role in these matters, is a very serious issue. We cannot and should not gloss over those failings. Historically, RICS took a very limited view of providing leadership to the market for the public good, being constrained by its internal practices and policies, such as on EWS1 forms, and this contributed to difficulties for leaseholders in selling their flats.

My noble friend Lord Caithness said that the Government do not need this power: he asked what the point was of including the clause. In this clause, we are setting out the scope of any review, and this should act as a reassurance as to the limits of what the Secretary of State is empowered to do. I say again: RICS’s independence of working is not in question. At the same time, the Government are signalling the importance we attach to RICS in protecting consumer interests through its guidance and standards, as well as the regulatory functions it undertakes across the market, improving and managing the built environment and land.

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[Baroness Pinnock (LD)]

My Lords, I concur with and support entirely the comments made by my noble friend Lord Stunell and the noble Earl, Lord Lytton, about the amendments in this miscellany transferring the building safety regulator from the Health and Safety Executive. I hope the Minister will be able to give us a very clear reason why this change is being made in the Bill—indeed, why it is being made at all.

I want to focus my comments on Amendment 467F. It is a good job I am speaking after the right reverend Prelate the Bishop of Chelmsford, because it was not at all clear to me that that is what it is about. That is the problem with this group of government amendments; as I said earlier, a miscellany of issues has been put together because this is a levelling-up Bill and we can throw anything in. My guess was that it came from the Schools Bill, but reading the amendment without any explanation, it was not clear at all, so I have a few questions to put to the Minister.

First, can she assure us that the comments of the right reverend Prelate the Bishop of Chelmsford are accurate and this is entirely about schools with religious foundations, because that is not clear? In fact, I have a series of questions so that I can understand what the Government are seeking to achieve. Having been a school governor for very many years, I know that it is important that land use for schools is clear—whether they are part of a trust or a local authority—because otherwise future changes are very difficult. I speak from the heart in that regard.

This amendment puts forward four conditions that must occur. The heading of the new paragraph is “Compulsory transfer to trustees”, which is what first made me think that this perhaps needs more questioning. The idea is that a local authority has some premises, and an academy or trust has some, and they can do a swap. As this is to be a compulsory swap, what local consultation will there be and will it be a democratic decision? The implication is that it will not be a democratic decision of the local authority; it will be a compulsory land—or premises—swap. That is one issue on which I would like an answer. The second is, what if the premises to be exchanged are in a different location? If a school becomes located in a different part of the borough, what will that mean for the provision of school places within that council area? Would planning consent be required for schools to be relocated? Who will pay local authorities’ costs for the transfer? What if one set of premises was of higher value than the one that a school is taking over? How does that work? There is a series of questions to be answered. The Government had directed local authorities to sell their assets to help fund local services. What if the set of premises had been earmarked for sale for the benefit of the local authority? How does that work?

The noble Baroness, Lady Bennett, asked similar questions to mine, and the right reverend Prelate the Bishop of Chelmsford explained that it is all about religious foundation schools. That is not clear in the Bill, and there is no Explanatory Memorandum. Apparently, there was one in respect of the Schools Bill; well, that is not very helpful to us.

Having just resigned as a governor of a voluntary controlled school which had a lot of land issues when it became an academy because of land ownerships and trusts, I really do want answers to this series of questions. As far as I am concerned, the building safety regulator and the compulsory transfer of land to trustees are two major issues that should not have been put in this Bill. They are nothing to do with levelling up.

[Baroness Hayman of Ullock (Lab)]

My Lords, I start by commenting on the amendments on building safety. I will not repeat the points that other noble Lords have made. The noble Lord, Lord Stunell, went thoroughly into the reasons why there are concerns about these amendments, as did the noble Earl, Lord Lytton, so there is no need for me to repeat the detail; the concerns have been raised extremely clearly.

I want to ask just one thing. This provision seeks to transfer powers to the Health and Safety Executive, so that it will become the building safety regulator. When we left EU REACH, the chemicals regulation system, we raised a lot of concerns about the Government’s proposal that the HSE become the regulator for the UK REACH. The concerns were about the skills and resource levels of the HSE in taking on these new responsibilities. If the Government now intend to give the HSE yet another very large responsibility, how is the department being set up to manage all these increased responsibilities that the Government keep putting on its shoulders?

I was quite interested that the noble Lord, Lord Stunell, said that one of the amendments extended the scope of the Bill to allow the others in. I congratulate the Government on finding anything that was out of scope of the Bill—it is quite an achievement.

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[Baroness Scott of Bybrook (Con)]

What I can assure the noble Lord of is that, if we do have to go down this route, both Houses of Parliament will have a say in that. I am sure that we will have long debates on it. The noble Lord also asked about accountability to the House. As I have said, the powers will be made under the affirmative procedure to ensure that the House is given full and proper opportunity to scrutinise any proposals if they come in due course.

The noble Earl, Lord Lytton, brought up the concerns raised by the Delegated Powers and Regulatory Reform Committee in its 31st report of this Session. I reassure noble Lords that the powers that we are seeking to take in Amendment 467D are intended to allow us to change only the home of the building safety regulator, as created by the Building Safety Act. There is no intention or plan for fundamental policy change in that.

Moving on, the noble Baroness, Lady Pinnock, asked whether Amendment 467F was entirely about schools with religious foundations. There are also non-religious schools that have these charitable site trustees. We are not talking about academy trusts here: we are talking just about the charitable site trustees. They are mainly religious, but there are others that are not.

The noble Baroness, Lady Pinnock, also asked whether the trust required proceeds from the original premises to fund—no, I am sorry, this is something that I asked. It might be interesting to the noble Baroness that, if the trust required proceeds from the original premises to fund new schools, I was concerned about that. It has been made clear to me that capital funds come from local authorities where there is a need to provide sufficient school places, so I hope that will also put the noble Baroness’s mind at rest.

I was asked where the local authority fits into this. It will be in no worse a position than if the same schools had relocated as maintained schools or as foundation and voluntary schools, where the local authority would be obliged to provide the new site and transfer it to the trustees. Land would be held for the purposes of the academy, with appropriate protections for public value, including that the land could ultimately return to the authority if in future it is no longer needed for a school, so the local authority is protected on that.

The noble Baroness also asked whether it is a compulsory swap and what local consultation there would be for the local authority on the swap. It would be a compulsory swap only if the trustees are being asked to surrender their interest in the current site in exchange. We would expect such arrangements to occur only after the usual processes for relocating a school, which would include consultation and a consideration of the impact of moving places from one site to the other. All those issues would have been looked at.

The noble Baroness, Lady Hayman of Ullock, asked whether—I cannot read this.

[Baroness Hayman of Ullock (Lab)]

Just send it to me.

[Baroness Scott of Bybrook (Con)]

It was about giving the HSE some other responsibility.

[Baroness Hayman of Ullock (Lab)]

I asked about resources.

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Moved by

[Baroness Hayman of Ullock]

473: After Clause 214, insert the following new Clause—
“Regional mutual banks(1) The Secretary of State must report to Parliament, within 3 months of the date of the passing of this Act, on existing barriers to the establishment of regional mutual banks in the United Kingdom.(2) The report must consider—(a) current capital adequacy requirements,(b) other limiting features of the current regime,(c) regional mutual bank structures in jurisdictions outside the United Kingdom and the adoption and adaptation to the United Kingdom of best practice, and(d) the use of dormant assets as seed capital for the establishment of such regional mutual banks.”

[Baroness Hayman of Ullock (Lab)]

My Lords in the absence of the noble Lord, Lord Holmes, I shall move this amendment on his behalf.

One particular problem that has dogged us for decades is the lack of funding, including sufficient credit facilities, to our critical SME community. We know that SMEs are considered to be the backbone of the economy, the largest private employer, the large companies of tomorrow and so on, but despite this, the funds have never really flowed through from our traditional financial services sector to support SME activity and rightful ambition. The British Business Bank put it perfectly in its March 2022 report:

“Historically, SMEs are underserved by the finance sector, and often don't have the same characteristics that banks and other lenders like about large corporations. This includes lengthy credit histories, detailed audits and financial accounts, and a large portfolio of assets for collateral on debts. For start-ups, whose business models are unproven and yet to be deemed creditworthy, these problems are even more pronounced”.


This is not a universal problem experienced by SMEs around the world. It is done differently elsewhere. In Germany, for example, in 2021 SME funding was more than €600 billion; in the UK in the same period, it was just £57 billion. Even when all the necessary adjustments are applied, it is not a great picture, nor a growth picture. It is hardly surprising then that we are seeing a post-Covid trend of SMEs moving away from the traditional financial services sector. Again, the British Business Bank has noted:

“After the end of the coronavirus loans facility in March 2021, an interesting trend to emerge was that SMEs began to move away from large banks for their finance needs. Instead, challenger and specialist banks made up 51% of lending in 2021, compared with 32% in 2020”.


When it comes to the regional dimension, it just gets worse for SMEs, with those in London receiving over 70% of equity investment, with just 30% for the rest of the UK. This is obviously not great news for the economy, but it also results in lower levels of community and differing levels of well-being. How can we level up this country if we do not urgently address this issue of the extreme and unacceptable regional funding differentials for our SMEs? Although a perennial problem, it is raised now because there are two important pieces of legislation that provide an opportunity to do something about it: the Financial Services and Markets Bill, which has been going through your Lordships’ House; and the levelling-up Bill which is before us. I think a critical need for regional mutual banks is an essential part of the solution.

The clear intention of the amendment in the name of the noble Lord, Lord Holmes, is threefold: first, to dramatically increase financial inclusion for our SME businesses; secondly, to develop an effective patient capital ecosystem across the UK; thirdly, to reignite the positive reality of friendly societies and mutuals. The amendment would force the consideration of current capital adequacy requirements. Are they fit for what we want across all potential financial service models?

It is also essential that such potential sources of regional finance are seen very much against the backdrop of digital transformation. Such banks need a physical presence in all our communities, with business bankers ready to support customers at each growth stage. Benefits must also encompass full digital functionality, alongside the physical. If got right, such banks could bring to bear another element of the financial and digital inclusion story, with the financial inclusion potentially driving the digital.

None of this is about lowering thresholds for SME finance. If we support SMEs by increasing the range and number of regional mutual banks, then the banks will do what they do best and SMEs will thrive, as will the communities and the towns and cities in which they are based. Through this single intervention, one of the fundamental planks on which levelling up will come will have been effectively laid.

As we build our way out of Covid, there could barely be a better moment to consider the benefits of regional mutual banks, built in our great communities with close customer connections and, crucially, with an interest and a stake in all those future economic, social, individual and organisational stories of success. We need regional flows of finance to enable and empower more, and more regionally diverse, SMEs. Regional mutual banks can be an essential part of delivering this, and the Government should look very carefully at the amendment of the noble Lord, Lord Holmes, and consider including it within their levelling-up brief. I beg to move.

[Baroness Pinnock (LD)]

My Lords, this country used to have many regional mutual banks. One still remains, in name anyway: the Yorkshire Bank. That is a testimony, I think, to its importance within the great county of Yorkshire. What has been a sad reflection of what has happened in the country in terms of banking is that it is now dominated by the five great big banking consortiums. That is partly why the presence of so-called high street banks in our towns and small towns across the country are disappearing, to the detriment of many people who live there and certainly many businesses there.

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[Baroness Scott of Bybrook (Con)]

My Lords, Amendment 473, tabled by my noble friend Lord Holmes of Richmond, and ably moved by the noble Baroness, Lady Hayman of Ullock, would require the Secretary of State to report to Parliament—within three months of the day on which this Bill is passed—on the existing barriers to the establishment of regional mutual banks in the United Kingdom. I want to make it clear that the Government are supportive of the choice provided by mutual institutions in financial services. They recognise the contribution that these member-owned, democratically controlled institutions make to the local communities they serve and to the wider economy.

However, regional mutual banks are still in the process of establishing themselves here in the United Kingdom, with some now in the process of obtaining their banking licences. It is, therefore, too early to report on the current regime and any possible limitations of this for regional mutual banks. I know that my noble friend Lord Holmes was interested in how regional mutual banks have performed in other jurisdictions and how we could use these examples to consider the UK’s own capital adequacy requirements. In this instance, international comparisons may not be the most helpful to make. The UK is inherently a different jurisdiction, with different legislative and regulatory frameworks from those in the US, Europe or elsewhere.

Abroad, some regional mutual banks have been in existence for centuries and have been able to build up their capital base through retained earnings. In the UK, regional mutual banks are not yet established and are continuing to progress within the UK’s legislative framework. However, the Treasury is continuing to engage with the mutuals sector and other industry members to assess how the Government can best support the growth of mutuals going forward. I hope that this provides sufficient reassurance for the noble Baroness, Lady Hayman of Ullock—on behalf of my noble friend Lord Holmes of Richmond—to feel able to withdraw the amendment.

[Baroness Hayman of Ullock (Lab)]

I thank the Minister very much for her response. I suddenly thought that I probably should have declared my interests as a member of the Co-operative Party and as someone who believes very strongly in the benefits of the mutual model. I am sure that the noble Lord, Lord Holmes, will read Hansard very carefully. In the meantime, I beg leave to withdraw.

Amendment 473 withdrawn.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Sheehan. She has made a powerful case for ground source heat network trials, so I will not pursue that, except to note that the case is clearly much more overwhelming than the weak to non-existent case for the hydrogen trial the Government seem to want to pursue.

I will speak to Amendment 478, which has full cross-party and non-party support, and which the Green Party would have attached its name to had there been space. I note that the noble Lord, Lord Lucas, with his Amendment 504GJE, is on to an important and crucial point. Like the noble Baroness, Lady Sheehan, I was going to refer noble Lords to the CPRE report, which is due out in about nine hours’ time, so we are pre-empting that a little. I also reference something that shows where we could have been—the Primrose Hill solar village in Huddersfield, which was built nearly two decades ago. Driven by pioneering local Green councillor Andrew Cooper, 79 affordable homes were built there on a brownfield site. For two decades the people there have been benefiting from the kind of housing we should have been building everywhere in the country, all of the time. That it is in a very deprived area of Huddersfield, classic levelling-up territory, demonstrates how much people have suffered because of the policy failures of the past two decades.

Rather than repeating what other people have said, I want to make a few additional points. The number of households that are retrofitting solar panels has reached its highest level in more than seven years. More than 50,000 installed them between January and March, which shows how much people want solar panels. They are going for it, but through the much more expensive, difficult and complicated method of retrofitting, rather than buying a new home that already has them on the roof, which is what Amendment 478 would provide for.

I will cross-reference certain points rather than go through everything. My honourable friend in the other place, Caroline Lucas, had a Westminster Hall debate on 22 March on rooftop solar for homes. The point was made that about two-thirds of what is currently fitted is ground mounted. It is nonsensical that we are using up ground for that. Earlier today, your Lordship’s House debated the land use strategy and the establishment of a land use commission. Surely, such as commission would be saying that there are so many things we could be doing with that land that we should not be using it for that until every roof—certainly every new roof—has solar panels fitted to it.

I want to pick up on some points that might be made in opposition to this amendment, perhaps pre-empting the Minister. Yes, it could add cost to a new property, but there would also be an estimated saving of between £974 and £1,150 per year per home. Taking into account the cost-of-living crisis, the cost would be rapidly recovered by the people living in these homes.

We want to talk about having affordable housing, and part of affordability is being able to afford to run the home on a year-to-year basis into the future. Plus, we are in a climate emergency, the world is not meeting its carbon targets, and this is one obvious way that Britain should be making a further contribution.

In the debate in the other place, it was suggested that there are other ways of doing this, and that maybe solar panels are not the answer. Of course, this amendment refers to the appropriate housing; it is not saying every single house but, more than that, solar panels do not preclude also having ground source or air source heat pumps. In fact, the combination of those two things is absolutely valuable.

There has been talk of global supply challenges, but the right political will would ensure that it is possible to source these materials outside China, where the bulk of the current issues—particularly human rights—regarding solar panels lie. There is also the question of sourcing silicon, but there are alternatives to that and breakthroughs are being made all the time. It has been suggested this may stifle innovation somehow. This is not just about delivering the basic fabric of a building that should be there; it does not mean that we cannot do many additional things as well, as the noble Baroness, Lady Sheehan, has so clearly suggested.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Hayman, for introducing this group of amendments and her amendment in particular. We strongly support amendments that aim to increase renewable energy sources. This is a levelling-up Bill. One of the missions laid out in the White Paper is to increase well-being. When we think about the cost of energy at the moment, surely having well-heated homes has to be a measure of well-being in society. By supporting these amendments, we can make steps towards meeting that mission. As the noble Baroness said in the introduction to her amendment, it is simple but sensible. We completely agree.

The amendment from the noble Lord, Lord Lucas, is again really important. There is such huge potential for solar panels on commercial buildings that we completely miss. The thing that sprung to mind when I read his amendment was those colossal warehouses that can be seen along the motorways when driving along. They are in completely open space, and surely there is huge potential for putting solar panels on their roofs.

We know that, by 2050, the United Kingdom has a target to cut emissions of CO₂ by 80%, but we also know that the Government are way off achieving that target. Again, as the noble Baroness said, it is really good that the Government are beginning to realise the importance and potential of solar power, following on from the Skidmore review, but as she also said, what we need is action—to make the potential of solar power a reality. If new-build homes had solar panels and the ability to store energy in batteries—which is, of course, something that we have to develop further—as a country we would clearly benefit from a fairly significant reduction in emissions of carbon dioxide. To me, it seems completely obvious: the more energy we harness from the sun, the less we need to get from fossil fuels.

Solar panels mean that, for certain parts of the year, households can enjoy being completely self-powered. This would of course bring a significant reduction to their energy bills, helping to meet that mission of well-being—yet, as the noble Baroness, Lady Hayman, said, there is no target for this yet. If you are going genuinely to deliver and make a difference, you need to set targets.

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Moved by

[Baroness Hayman of Ullock]

479: After Clause 214, insert the following new Clause—
“Interaction with the Retained EU Law (Revocation and Reform) Act 2023Within 90 days of this Act being passed, the Secretary of State must publish an assessment of the interaction of this Act with any Act of Parliament resulting from the Retained EU Law (Revocation and Reform) Bill that was introduced into the House of Commons on 22 September 2022.”Member's explanatory statement
This means that the Secretary of State must publish an assessment of the interaction of this Act with the Retained EU Law (Revocation and Reform) Bill.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I have the only amendment in this group. I will be brief because it is pretty straightforward and I hope I can have a reasonably straightforward response from the Minister as there is no complexity around this.

Amendment 479 asks the Secretary of State to publish an assessment of the interaction of this Bill, when it becomes an Act, with the Retained EU Law (Revocation and Reform) Bill, or Act as it will be. I asked about this in the REUL Bill discussions that we had. It is really around the Water Resources (Environmental Impact Assessment) (England and Wales) Regulations 2003, which are included in the list in the REUL Bill. The reason I want to raise this here is because, as it affects environmental impact assessments, I feel we need to put on the record the fact that it will interact with the Levelling-Up and Regeneration Bill because this is proposing extensive powers for a new system of environmental impact assessments to replace the current regulations which include the water resources regulations.

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[Earl Howe (Con)]

My Lords, the Retained EU Law (Revocation and Reform) Bill creates the powers for the Government to amend retained EU law and will remove the special status of retained EU law in the UK. On 17 May, the House agreed a government amendment to replace the previously proposed sunset of retained EU law in the Bill with a list of retained EU law for revocation at the end of 2023. This provides clarity to the House and certainty for business by making it clear which legislation will be revoked. Powers in the Bill that allow us to continue to amend retained EU law remain, so further regulation can be revoked or reformed in the future. This will mean that we still fully take back control of our laws and end the supremacy and special status of retained EU law by the end of 2023.

As noble Lords will be aware, the REUL Bill had Third Reading in this House this afternoon. Given that both Bills are still passing through Parliament, the Government are working through what the interactions are between them. I do not think it appropriate to amend the Bill in this way, but I will commit to writing to the noble Baroness, Lady Hayman of Ullock, by the end of this year to set out the interaction between the two Bills. I hope that is helpful.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for that very helpful response. He has completely taken on board the point that I am trying to make, and I appreciate that. A letter explaining exactly how it will all work together by the end of the year will be extremely helpful. I thank the Minister very much, and I beg leave to withdraw my amendment.

Amendment 479 withdrawn.