Levelling-up and Regeneration Bill

Baroness Hayman of Ullock Excerpts

Report stage
Tuesday 18th July 2023 Lords Chamber

It is reassuring to understand that the Government are binding themselves to consult and to seek legislative competence. At this point, I certainly would not oppose the amendments, I welcome the discussions that have occurred and am grateful for the briefings that have been held.

[Baroness Hayman of Ullock (Lab)]

My Lords, I want briefly to comment on the amendments in the name of my noble friend Lady Ritchie of Downpatrick. She talked about her concerns about Clause 148 and its weak requirement regarding the devolved nations. She particularly talked about the fact that it is problematic for Northern Ireland, and we note that there are concerns about the regression risk that this part of the Bill could bring. She also mentioned the fact that the Scottish Government have expressed their opposition to the Bill on those grounds. In Committee on 18 May, the noble Earl stated that the UK Government were having

“discussions with the devolved Governments on how these powers should operate”.—[Official Report, 18/5/23; col. 447.]

We believe that the amendments tabled by my noble friend help to resolve the concerns expressed by requiring Ministers to secure the consent of a devolved Administration before setting EOR regulations within the competence of that Administration, rather than simply consulting them. We very much support the amendments in the name of my noble friend.

It is worth pointing out that this means that there has still been no movement regarding Scotland, and it would be good to know that those discussions are still ongoing to try to make some progress.

A concern to mention briefly on the government amendments is around those that relate to the habitats regulations. The Bill allows for changes to the existing regulations with only a vague non-regression commitment in Clause 147. I just point out that this is why I have Amendment 106 in group 5, which creates a robust non-regression test, and that is one reason I tabled that—just to tie the two groups together, so that the noble Earl has some frame of reference on where we are coming from on that. Having said that, if he can provide further clarity on the issues raised by my noble friend, I am sure we will be very grateful.

[Earl Howe (Con)]

My Lords, I am, as ever, grateful to noble Lords who have spoken and, in particular, to the noble Baroness, Lady Ritchie, for the way in which she spoke to her amendments and for her experience in devolved matters generally. She will have heard that we consider that the Government’s amendments speak to the substance of her amendments and, in fact, go further in extending the powers to make EOR regulations for all of the devolved Administrations.

The Government consider it crucial that these powers are made available across the United Kingdom to allow for continued close co-operation and interoperability between environmental assessment regimes across the UK. Securing this ability to work together across the different jurisdictions reduces the risk of harmful divergence. This is particularly crucial for areas such as offshore wind, where minimising delay and cost is vital if we are to meet our environmental commitments and achieve energy security.

The noble Baroness, Lady Ritchie, spoke of these powers being imposed on devolved Administrations. The first point to make in that context is that there is no obligation or time limit under the powers for the devolved Administrations to use the powers that Part 6 would grant them. The powers would be exercisable at the discretion of the devolved Administrations if they chose to use them. However, these are powers that would allow devolved Administrations broad scope to implement their own new system of environmental assessment.

In addition, the model would mean that, where assessment is needed under both EOR and an existing EIA/SEA regime, whether in Scotland, England, Wales or Northern Ireland, the development or plan need satisfy only one of the regimes, avoiding the need for duplication. Without the ability to adopt EOR, the UK Government and the devolved Administrations would have no interoperability and gradually increasing divergence, and that could mean certain projects or plans requiring assessment under two separate regimes far into the future, which, as is obvious, could lead to a chilling effect on development of certain types and in certain locations, as well as cross-border plans. Devolved Administrations adopting these powers would not completely remove the risk of divergence, as the current powers model would allow devolved Administrations complete discretion on what their system of environmental assessment looks like, but it would retain the potential for continued alignment where this is considered beneficial.

The noble Baroness raised a number of points and questions about Northern Ireland, and I shall ensure that these are taken up at departmental level and that the department keeps in touch with her about the action being taken. I just pick up the issue she raised of the absence of an Executive in Northern Ireland. In the current situation, with the Assembly not sitting, Northern Ireland is clearly not in a position to provide legislative consent for the Bill, so in respect of Part 6, the UK Government propose to extend these powers to Northern Ireland on the same basis as that agreed with the Welsh Government. This is not a decision that the UK Government have taken lightly, but we believe it is the right approach in these circumstances, as it preserves the opportunity for reform for a future Executive in a way that preserves the unique situation on the island of Ireland.

Legislating in this way provides Northern Ireland with safeguards on the use of these powers that would ensure that the consent of relevant Northern Ireland departments was required if the UK Government wished to use the powers in Part 6 to legislate for matters within devolved legislative competence. Not extending the powers in this way would mean the loss of these safeguards, as well as the loss of the opportunity for the Northern Ireland Executive to benefit from these powers once the Executive have been restored.

I am conscious that the noble Baroness has sought to introduce amendments for each of the devolved Administrations. While the Government share the noble Baroness’s view that it would be best for each Administration to be placed on an even footing, at this stage the amendments provide the Scottish Government with concurrent powers, but on slightly different terms from those of Wales and Northern Ireland. However, we are continuing to engage with the Scottish Government on this issue and remain open to extending the same provisions to the Scottish Government to place each Administration on the same footing, should they agree to that. On the basis of discussions continuing, I hope that the noble Baroness will not feel the need to press her amendments.

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[Baroness Pinnock (LD)]

My Lords, I thank the noble Lords, Lord Young and Lord Lansley, for throwing some much-needed light on the practicalities of community land auctions. During the debate in Committee, a number of us expressed scepticism about the value of having this in the Bill and how it will work. Nevertheless, it is a pilot scheme; there are plenty of reservations in the Bill itself that may make it more difficult for the blue-sky thinking of the think tanks, this having been brought forward at a late stage of the Bill.

There are some voices in the housing sector that support the proposal of community land auctions. Their argument is that this is the best way of extracting a fair portion of the enhanced land value that allocation for development ensures. That is what they say. Others argue, as did the noble Lords, that it will have the perverse effect of buying planning permissions—I think that was the phrase the noble Lord, Lord Young, used in Committee. For me, time will tell. The noble Lords have said they will not push this amendment, so time will tell whether the scheme is attractive to councils and whether it will then deliver what its proponents claim.

[Baroness Hayman of Ullock (Lab)]

My Lords, I will be very brief. I listened with great interest to what the noble Lord, Lord Young of Cookham, said. The issue is that, on paper, this looks quite sensible, but when we start to dig into it and look at it, that peters away. That is one of the problems.

There is an assumption that the option value will be significantly less than the market value for housing development, which we have mentioned. That is not necessarily going to work out in practice; it is a flawed idea when you look at how it works practically. The circumstances for which the theoretical arrangement is designed are really a collection of small, completely substitutable land parcels with a number of different owners. I do not know that that necessarily bears much resemblance, in reality, to the characteristics of land management and the market across the country. That is one of our concerns. Further, the idea that auctions are going to drive down land prices in the absence of any element of compulsion is, we think, pretty unlikely, to say the least. There is an example of that with Transport for London’s disappointing experience with the development rights auction model, which failed to deliver.

Thirdly, if the arrangements prove to be workable in practice, it will almost certainly be an attractive proposition only in areas where there is significant housing demand and high land values; so I do not necessarily see it as something that will be practical to roll out around the country.

On those key points, I think it has been a discussion worth having.

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Moved by

[Baroness Hayman of Ullock]

100: Clause 143, page 171, line 37, leave out “may” and insert “must”
Member’s explanatory statement
This amendment will ensure that climate and other key environmental considerations, including improving the condition of protected sites, will be included in the new EOR regime.

[Baroness Hayman of Ullock (Lab)]

My Lords, this group is made up of four amendments in my name. They are designed to ensure that climate and other key environmental considerations are included in the new environmental outcomes reports, the details of which will be set out in secondary legislation, as we have heard; and to probe whether the EORs will support the UN’s sustainable development goals. I would be grateful if the Minister could shed some light on these matters in her response.

My Amendment 106 specifically asks that the new system

“does not weaken existing environmental protections”;

in other words, it is an amendment to ensure non-regression. Environmental assessments play an important role in limiting nature and climate harms from planning decisions. Such an extensive series of changes to environmental assessments, delivered largely through regulations, could, we believe, open the door to environmental regression that has limited parliamentary scrutiny. Concerns to this effect have been expressed by the Office for Environmental Protection and a number of environmental NGOs.

Unfortunately, the one safeguard in this part of the Bill fails to address the regression risk. Clause 147 states:

“The Secretary of State may make EOR regulations only if satisfied that”


the

“overall level of environmental protection”

will not be less than before. The stipulation overall undermines the utility of this safeguard as the effect is to allow the Secretary of State to weaken individual existing protections as long as they consider this to be balanced out elsewhere in order to maintain overall levels.

We discussed this issue at some length in Committee, so I will not go into detail on the risks that we believe this approach carries. However, it remains unclear why this low-bar test for new regulations has been chosen over the higher bar provided by the Environment Act, Section 20 of which requires Ministers to state that new legislation will not reduce the level of environmental protection provided for by any existing environmental law. My amendment would apply this recent and relevant non-regression precedent to EOR regulations, thereby ensuring that environmental protection is not weakened through the introduction of the new EOR regime by specifying that the Secretary of State should demonstrate that EOR regulations would not diminish any individual environmental protection applying at the time that the Bill passes. This would have the effect of aligning Clause 147 with the Environment Act and the Government’s own commitment, as stated in Committee, to use the EOR regime as an

“opportunity to protect the environment”.—[Official Report, 18/5/23; col. 444.]

I urge the Minister to consider accepting my amendment as the provision of a robust non-regression clause is the minimum required to ensure that the proposed EOR regime does not harm the environment.

A series of government amendments on Report—including Amendments 133 and 138, which we have debated today—seek to define more closely the environmental protections that would be subject to the new EOR powers. However, this listing exercise provides little to no assurance that environmental regression will not take place. We believe that the threat of environmental regression is significant. In its response just last month, in June, to the Government’s EOR consultation, the Office for Environmental Protection observed that

“there are risks associated with a move from well-established regimes when so much rides on effective delivery over the next few years (and beyond)”.

To address these risks, Clause 147 needs to be strengthened and non-regression assured before the EOR regime is introduced. My amendments would achieve this. I beg to move.

[Baroness Young of Old Scone (Lab)]

My Lords, I support Amendment 106 in the name of the noble Baroness, Lady Hayman.

I have been a great fan of the habitats regulations over the years; I was part of the movement that helped shape them and they have done some pretty sterling work for us, both here in this country as well as across Europe. They have one major feature at the moment: they are understood by both the development community and the environmental movement. There is a shedload of case law that surrounds them, enabling people to understand quite considerably and in detail how they operate. However, I accept that we move on; that is Brexit for you.

The regulations are now being replaced in what I regard as a rather piecemeal fashion but, nevertheless, that is what we have got. So we must make sure that all the building blocks that are being put in place to replace the habitats regulations are going to work properly; and this block, reflected in Amendment 106, is an important one. This is a risky time to be meddling with environmental assessment regimes, when we are at a crisis stage on the climate and biodiversity—but we are where we are, so let us have a look at how we can make this better.

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[Baroness Scott of Bybrook (Con)]

My Lords, Amendments 100 and 101 in the name of the noble Baroness, Lady Hayman of Ullock, would require that all regulations made under Part 6 specify environmental outcomes, whether or not they actually relate to the outcomes themselves. This would place a significant burden on subsequent regulations and would require outcomes across every process element, even where not relevant—for example, on regulations related to enforcement, exemptions and guidance.

We recognise that framing will be critical and recently carried out a consultation on how we can translate the Government’s ambitions into deliverable outcomes, which is surely the key consideration here. The Government have also legislated to ensure additional consultations on future outcomes, as well as adopting the affirmative procedure in Parliament on the associated regulations.

Regarding Amendment 101, the Government have been careful to ensure that the new system is capable of capturing all the current elements of the environmental assessment process. This allows the Secretary of State to consider health matters such as air pollution when setting outcomes. Impacts on human health are covered by “protection of people” in Clause 143(2)(b). When developing secondary legislation, we will consult with stakeholders to ensure that health-related commitments are sufficiently captured.

On Amendment 106, the drafting of Clause 147 mirrors the EU-UK Trade and Cooperation Agreement to ensure that, when bringing forward reforms, we live up to our commitment to non-regression. As well as departing from the existing drafting, Amendment 106 would create a rigid approach to non-regression. Removing “overall” from levels of environmental protection would remove the ability to look at the effect of reforms as a whole. When read alongside the commitment to international obligations and expansive duties to consult, we feel that the non-regression clause strikes the right balance to ensure EORs can be an effective tool in managing the environment.

Let me respond to all the noble Baronesses who have spoken by making it clear that, in creating a new system of environmental assessment, it is essential that the standards are kept high. The Government are committed to improving what exists and ensuring that we can deliver on the challenges we face in the 21st century. Focusing on environmental outcomes will allow the Government to set ambitions for plans and developments that build on the Environment Act and other environmental commitments. The legislation is clear that the Government cannot use these powers to reduce the level of environmental protection, and it includes a clause setting out this commitment to non-regression.

On Amendment 107, I have no reservation in saying that the UN sustainable development goals are crucial ambitions. The UK is committed to achieving them by 2030, as affirmed in the international development strategy and integrated review. The expansive nature of these goals is such that it is not possible for the planning and consenting frameworks within which EORs operate to support them all. To require the EOR regime to do so would significantly expand the scope of the assessment beyond the existing legal frameworks of the environmental impact assessments and strategic environmental assessments.

This amendment would exacerbate the biggest issue with the current process, which is a mandatory list of topics that are required to be considered for all assessments, whether relevant or not. Listing matters to be considered in this way has resulted in overly long, complex and inaccessible documents, full of unnecessary material in case an omission invites legal challenge. It would thwart our efforts to make the process more effective, meaningful and manageable.

Environmental assessment was established as a tool to ensure that the environmental impacts of a development were not overlooked in favour of the social and economic priorities that drive development activity. A requirement to support the delivery of all goals would divert attention away from the EOR’s core purpose of providing an additional level of scrutiny of the effects of the development activity on the environment.

I hope this provides the reassurances necessary for the noble Baroness, Lady Hayman of Ullock, to withdraw her Amendment 100 and for the other amendments not to be moved when they are reached.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for her response. I have to say that I still have concerns about non-regression. If it works for the Environment Act, I do not understand why it would not work here. Having said that, I beg leave to withdraw my amendment.

Amendment 100 withdrawn.

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[Baroness Parminter (LD)]

My Lords, briefly, in the absence of my noble friend Lady Bakewell of Hardington Mandeville, I add our Benches’ support for Amendment 139 and will make three brief points. The first has been touched on by other Members, but I do not think the figures have been set out as strongly as they need to be.

If the Government are to achieve their 30 by 30 target by 2030, which is seven years away, they will have to rapidly increase the amount of protected areas that we have in the UK. As the noble Baroness, Lady Jones, said, 25% of our protected areas are national parks and AONBs—15% of them AONBs and 10% national parks. If we do not use the opportunities in those protected landscapes, it is frankly inconceivable that we will be able to get to 30 by 30. We cannot just extrapolate and say that all those areas will be able to equate to the 30 by 30 target, but the strongest increases in purposes will enable the landowners, and people who care for that land, to help move towards that target.

The second issue is connectivity, which the noble Baroness, Lady Willis, touched on. Given the size of the national parks and AONBs, and given the threats to our species and the impacts of climate change, we know that we need more connectivity between our sites. These large areas of our national parks and AONBs offer the best opportunities, if not for 30 by 30 then for providing areas of respite and connectivity for species. I wanted to highlight that point.

My third point has been touched on by other Members and I just want to reiterate it. This amendment gives equal weight to the other existing statutory purposes for national parks and AONBs. It does not say that nature is above the requirements for economic activity in them, which we accept, or above the rights of people to live and work in—and enjoy—a national park, which we accept. It is saying that, at the moment, it is not on a level playing field, and given the nature biodiversity crisis that we have, we need all the statutory purposes to be on a level. We need people to work; we need our farmers; we need people to want to live there.

With the AONB where I am in Surrey, I know how much nature underpins the economic activity and businesses—the food producers and wood crafters. We need all that activity. We are not saying that nature needs to be above that but that, at the moment, as the Government themselves admitted in the Glover review response, the terminology—to conserve and enhance—is not strong enough. That is what the Government said; that it is not strong enough and that they would do something about it. This is the chance to give it that level pegging and this is the Bill to do it in. As the noble Baroness, Lady Jones, says, if the Minister is not prepared to accept the wording, can he please be clear in explaining why not?

[Baroness Hayman of Ullock (Lab)]

My Lords, I just want to say how much we support the amendment tabled in the name of the noble Lord, Lord Randall, and so ably introduced by the noble Baroness, Lady Willis of Summertown. We have heard that it would deliver a new focus on nature by implementing the key recommendations from the Glover review of protected landscapes, all of which were previously agreed by the Government. This is an opportunity to move forward on them and I really hope that the Minister can give us some hope that we are going to achieve some of that.

[Lord Benyon (Con)]

My Lords, I thank the noble Baroness, Lady Willis, for moving my noble friend Lord Randall’s Amendment 139. The Government recognise how precious our protected landscapes are, and the Environment Act’s recently commenced biodiversity duty will play a vital role in further improving their ability to deliver for nature. The noble Baroness is absolutely right that there is no point in talking about 30 by 30 as if it was a line on a map; it has to be a quality that we are seeking to protect. We are determined that national parks and AONBs should play their part in really protecting nature and the environment. I will come on to talk about socioeconomic activities when I respond to my noble friend Lady McIntosh’s point.

However, the current statutory purposes are well established. Adding five purposes would cause confusion, particularly when it comes to prioritisation. Instead, we will publish an outcomes framework to define the expected contribution of protected landscapes to national targets later this year. This framework will be embedded within management plans to ensure they reflect the Government’s priorities—the priorities enshrined in the 25- year environment plan and in our environmental improvement plan, as part of the Environment Act. We believe this will deliver the desired outcomes in a less disruptive and more agile way than through legislation. We have also taken on board my noble friend Lord Blencathra’s excellent suggestion that new guidance would clarify interpretation of legislation. The Government will publish guidance this year on management plans and, next year, on the duties on public bodies.

I hope that is an important indication to your Lordships that we are determined to ensure that we achieve the kind of requirements for the purposes that these places were designated. When the 1949 Act was passed, no one was talking about climate change or about a crisis of species decline—but we are, and we want these landscapes to contribute to the response that this Government so passionately want to achieve, which is a reversal of the decline of species by 2030, with all those Lawton principles of bigger, better and more joined up absolutely functioning at the heart of it. I hope I have said enough to enable the noble Baroness, Lady Willis, to withdraw the amendment in the name of my noble friend Lord Randall.

Levelling-up and Regeneration Bill

Baroness Hayman of Ullock Excerpts

Report stage
Thursday 13th July 2023 Lords Chamber

[Lord Shipley (LD)]

My Lords, I have two amendments in this group. It is not my intention to speak at length about them or to test the opinion of the House.

I have a great concern about the role of audit. I do not think that the existence of Oflog is sufficient to address the problems that we have experienced recently around processes in local government being inadequate to prevent excessive expenditure—particularly capital expenditure—which has spiralled out of control. There is a big issue for local authorities and combined authorities to address in terms of their ability to undertake an audit effectively. We are aware that a number of local authorities have not had their audits signed off for some time. There seems to be a capacity problem across local government in terms of the audit function.

All that said, my amendment is not a matter on which I will divide the House. I just hope that Ministers will try to address the issue of capacity in the audit function on audit committees where they exist. There will be audit committees for a CCA. I would like to think that enough expertise will be there to do the job properly. Simply to have at least one member is not enough. I have proposed a minimum of three. This is very important. When councillors are members of an audit committee, they have many demands on their time. What is required is a more professional focus of those who are trained in the area.

The second amendment relates to the ability of an audit committee, where it exists, to publish a report. At the moment, it is required to report to the CCA. I do not know what will happen if the CCA decides that it does not like it or does not want to publish it. Does the CCA have the power to prevent publication? I hope to hear from the Minister that something can be done to reassure me that an audit committee of a CCA can publish a report, even if the CCA does not wish it to do so, where the audit committee believes it to be in the public interest.

These two amendments are as simple as that. I am very happy for the Minister to take the issue away, to see what might happen when some of these statutory instruments start to come through your Lordships’ House. I beg to move Amendment 32.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief. I want to express our support for the amendments of the noble Lord, Lord Shipley, and to reiterate our concerns around audit and Oflog and how that will operate within its responsibilities. We need to ensure that there is a sufficient set-up to deal with the huge problems facing local authorities regarding audit. We know that some authorities have not had an audit for years, so this is clearly a real problem. We thank the noble Lord for tabling the amendments and hope that the Minister and the department will look carefully at his concerns and constructive suggestions, as we really need to resolve this issue.

[Earl Howe (Con)]

My Lords, Amendments 32 and 33 in the name of the noble Lord, Lord Shipley, seek to increase the transparency of CCAs. Greater functions and funding must come with strong accountability, but that must go hand in hand with decisions being made at the most local level possible. I can deal with this quite briefly and, I hope, to the noble Lord’s satisfaction.

As the Bill is drafted, a CCA’s audit committee can appoint three independent members, should it wish to, but it should be a matter for the CCA to decide exactly how many above one. The regulations that will establish the combined county authorities will set out the audit committee arrangements. They will provide that, where practicable, the membership of the audit committee reflects the political balance of the constituent councils of the combined county authority. Membership may not include any officer from the combined county authority or the combined county authority’s constituent councils. The regulations will provide for audit committees to appoint at least one independent person.

As regards transparency, in addition, Part VA of the Local Government Act 1972 provides powers to require the publication of reports of a committee or sub-committee of a principal council, including audit committees. Schedule 4 to this Bill already includes a consequential amendment to apply Part VA to CCAs.

I hope that that is helpful. The noble Lord has already kindly said that he will not press his amendment, but I hope that what I have said will reassure him.

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Moved by

[Baroness Hayman of Ullock]

36: After Clause 31, insert the following new Clause—
“Mayors and Police and Crime Commissioners: future relationships(1) Within 30 days of this act receiving Royal Assent, a Minister of the Crown must publish a statement on plans for the future relationship between Mayors and Police and Crime Commissioners.(2) The statement must include details on their distinct responsibilities and whether there are any plans to transfer functions between the two roles.”Member’s explanatory statement
The amendment intends to ensure that the government provides clarity over the future role of Mayors and PCCs.

[Baroness Hayman of Ullock (Lab)]

My Lords, my Amendment 36 is designed to provide clarity over the future relationships, roles and responsibilities of elected mayors and police and crime commissioners. The number of elected regional mayors has grown in recent years, and the Government clearly want to create more. At the same time, it also appears that the Bill’s proposals will allow these mayors to take over, rather than run alongside, the role of PCCs. Is it the Government’s intention to gradually phase out the elected PCCs?

This matters, of course, because policing has never been under more scrutiny and public confidence in some forces is, unfortunately, at rock bottom. Although PCCs do not have operational control over local forces, being watchdogs rather than police chiefs, the hiring and firing of chief constables is among their powers. Some mayors would quite like those powers for themselves, so may seek a mandate to take them when they are next up for election. We know that the next PCC and mayoral elections are due in 2024—next year—and that there are already strong feelings in some areas as to who should have the job of holding the police to account.

Current legislation allows for a CCA mayor to apply to become the PCC, first, if the majority of their constituent councils agree and, secondly, following any consultation. The Bill removes those conditions, even the need to consult. Clearly, consultation should be essential for a change as big as this.

In Committee, the Minister said that

“councils do not deliver any of the services required by the PCC. That is the job of the local police. Therefore, there is no crossover in that way”.—[Official Report, 13/3/23; col. 1143.]

There was concern about that statement at the time. As my noble friend Lady Taylor and others said, this is simply not the case. Councils look at anti-social behaviour; they look at domestic abuse work with their police colleagues. They have issues related to local area policing. Councils set priorities with local policing teams and deliver services jointly to address these priorities. District councils have a community safety plan, a committee and a chair, with constant interaction between the PCC’s office and the councils, including the county council.

To say that there is no crossover between councils and PCCs is, we believe, a false argument to justify what is planned as a simple takeover of functions. I say this to make it clear that we support the amendments in this group in the name of my noble friend Lord Bach, Amendments 54 and 307A, which I understand are to be spoken to by my noble friend Lord Hunt of Kings Heath. I also assure my noble friend Lord Hunt that if he wishes to push his Amendment 53A to a vote, he will have our support.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I thank my noble friend Lady Hayman. My noble friend Lord Bach is addressing a memorial meeting in Leicestershire for the late chief constable with whom he worked very closely as police and crime commissioner.

To bring it back to my local patch, my concern is that Clause 59 means that the Conservative Mayor of the West Midlands Combined Authority can become the police and crime commissioner for the West Midlands Police whenever he wants, without consultation or an open debate about the consequences for the West Midlands. That is a local example of what my noble friend Lady Hayman has just described. I recognise that a mayor can become a police and crime commissioner if he or she has general support, as I think has happened in Manchester and West Yorkshire, but in the West Midlands that support has not been forthcoming. The local authorities did not agree to it.

We have got used to voting for a police and crime commissioner. As it happens, it has been for a Labour one each time—most recently in May 2021, on the very same day that we voted for a Conservative mayor. There is no suggestion that the two postholders cannot work well together. Both were elected. I do not understand what the argument for change is. What is the argument for essentially nullifying the result of an election if it does not seem to suit one party?

This is compounded by Amendment 307, which allows the West Midlands mayor to take on PCC powers on Royal Assent—this could happen in September. What is the rush? If the Government are determined to go ahead with this clause, surely it should be done in a seemly and orderly fashion?

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[Baroness Scott of Bybrook (Con)]

I hope I have clarified that point. What happens in the future happens in the future; we are talking about this Bill, and the Bill does not change that at all. As I said, the levelling up White Paper set out the Government’s aspiration for, where policing and combined authority boundaries align, combined authority mayors to take the lead on public safety and take on the role of the PCC—and to take steps to remove the barriers to more CA mayors taking on PCC functions.

In an area where a devolution deal is agreed and the policing and CA boundaries are not coterminous, the Government wish to encourage close co-operation between the combined authority mayor and the PCC. While it is important for the area to shape exactly what strong partnership looks like in practice, one way of achieving this would be to use the non-constituent or associate membership model being established via provisions in the Bill. This could allow the PCC a seat at the table and allow the combined authority to confer voting rights on the PCC on matters relevant to public safety. The information and clarifications sought by this amendment are, we believe, already available, and we do not agree that there is any need for a further statement.

I turn to Amendment 54. Clause 59 amends the existing provisions concerning the local consent requirements for the combined authority mayors to take on the functions of a PCC. This reflects that this transfer is merely a process whereby functions are transferred from one directly elected person to another, without any implications for the local authorities in the area. Clause 59 maintains the triple-lock model for conferring functions. That triple lock is that any transfer or conferral of powers needs local consent, the agreement of the Secretary of State and approval by Parliament.

The change which Clause 59 makes is that in future, local consent will be given simply by the mayor, who is democratically accountable across the whole area. The transfer of PCC functions to a mayor in no way diminishes the role of local government in community safety. The local authority’s role in community safety partnerships remains the same and the police and crime panel will still exist, being responsible for scrutinising the mayor as the PCC in the same way it scrutinised the PCC.

A mayor having PCC functions will, we believe, be able more successfully to pursue their other ambitions and secure better overall outcomes for their community. A deputy mayor for policing and crime is appointed who can take on certain day-to-day responsibilities for this role, ensuring that the mayor can continue to focus on all their other priorities. The Government are clear that we expect mayors to discuss any proposal seeking a transfer of a PCC function with their combined authority in advance of submitting a request for such a transfer to government. This is in line with the existing expectation that mayors seek the views of the relevant PCC, whose consent is not required in legislation.

There is evidence of the considerable benefits that a mayor having PCC functions brings. For example, in Greater Manchester, following Greater Manchester Police’s escalation to “Engage” by His Majesty’s Inspectorate of Constabulary and Fire and Rescue Services, and the resignation of its former chief constable, the mayor appointed a new chief constable to develop and lead the force’s transformation programme, the result of which has been to ensure that the force focuses on getting the basics right and improving outcomes for the region. Under the leadership of the chief constable and with oversight and support from the mayor, Greater Manchester Police is now responding faster to emergency calls, and the number of open investigations has halved since 2021, and the inspectorate released the force from “Engage” in October 2022 on the strength of the confidence in its improvement trajectory. The Mayor of Greater Manchester, Andy Burnham, was clear that he, as the PCC for Greater Manchester, was accountable if things did not improve and that he should be held to account at the ballot box.

And finally, my Lords—although I think that says it all—government Amendment 307 provides for early commencement of Clause 59, which would allow for the statutory requirements that enable a transfer of PCC functions to CA mayors to be undertaken from the date of Royal Assent. This will enable the timely implementation of secondary legislation required for PCC function transfers to mayors to take place in time for the May 2024 elections.

The Government’s intention is to align as far as possible with the Gould principle relating to electoral management, which would suggest that any statutory instruments transferring PCC functions to mayors for May 2024 should be laid six months ahead of the elections in early November to provide notice to candidates, the electorate and the electoral administrations of any changes. It is for these reasons that the Government are unable to accept Amendment 307A proposed by the noble Lord, Lord Bach. It would time out any PCC transfers in time for mayoral combined authority elections in 2024 where there is a local desire for this.

I hope that noble Lords will feel able to accept the early commencement amendment for Clause 59 and that, following these explanations, the noble Baroness will feel able to withdraw her amendment.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for her response. I beg leave to withdraw my amendment.

Amendment 36 withdrawn.

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[Baroness Pinnock (LD)]

My Lords, I make clear that this amendment, to which I have added my name, is about local authorities having the option to make some of their meetings virtual or hybrid. It is not about going back to having all meetings held virtually; it is about having the option to do so where that makes sense in local circumstances.

During the Covid pandemic, we learned that virtual meetings could be conducted and worked well, in accordance with local authority conduct of meetings. There is no problem with the legality of how they were conducted. I accept the noble Baroness’s point about how we need to be together in a democracy but that is difficult on some occasions, and some people will be excluded if we do not provide an option for local authorities to make meetings accessible by making them virtual.

For example, people with disabilities find it more difficult to travel to a meeting in person—and then there are those with caring responsibilities and those with demanding work schedules. In many parts of the country now, people have long commutes to work. That option of a virtual meeting means that they can fulfil the responsibilities of being a local elected councillor as well as being in work. We do not want to revert to a situation in which local councils attract only people who are retired, because they are the only ones who have time or are able to go to meetings. We want as broad a selection as we can of people from our communities to become councillors, including the young and old, people with disabilities and people with caring responsibilities. We need them on our councils so that those voices are heard. That is one reason why the option—and it is an option—of holding meetings virtually is important.

The second is the huge size of some of the councils that the Government have now created. The noble Baroness, Lady McIntosh, used the example of North Yorkshire, which is now a unitary council. People know where Selby is now, so I will use the example of Selby, which is in the south of the southern tip of North Yorkshire. To travel to a meeting in Northallerton, where the county headquarters is, means covering a distance of about 53 miles, which would take probably an hour and a half—so it is a three-hour round trip to go to a council meeting. Think of how many people that will exclude: those who cannot drive would not be able to get there, as there are no buses and no trains, or very few. This is not like London. In the winter North Yorkshire has snow, which makes it even more difficult to get physically to meetings, which is when a virtual option makes really good sense. There is also the example of this House, which has managed perfectly well holding its Select Committees virtually. If we can do it here, surely local authorities should be allowed to do it.

My last point is that this amendment is to a part of the Bill on devolution. If devolution means anything, it means that local authorities and local councils should be able to make the decisions that matter to them—to have the flexibility to make decisions appropriate to their situation. We know that the Local Government Association, as the noble Baroness, Lady McIntosh, said, is fully supportive of this amendment and this approach. We will obviously listen very carefully to the response by the noble Earl, Lord Howe, but if the noble Baroness is not satisfied with the response and wishes to test the opinion of the House, we on these Benches, for the reasons I have given, will fully support her.

[Baroness Hayman of Ullock (Lab)]

My Lords, one thing that we have heard in the debates in Committee and today is that councillors are a vital part of our local democracy; they represent the needs of their residents and they work to improve outcomes for their local communities. But it is also important that any good decision-making is done by people who reflect their local communities and bring a range of experience, backgrounds and insight. As we have heard, by law, councillors have to attend meetings in person at the moment. We have also heard how important Zoom and Teams were for councils to continue to meet and the public to continue to take part during lockdown and the pandemic. It also brought people together and involved more people than previously in many cases.

We debated at length in Committee the benefits of continuing to allow virtual attendance at council meetings. The noble Baroness, Lady McIntosh of Pickering, thoroughly introduced that when she spoke to her amendment, and I am very happy to support her in what she is trying to do. Unfortunately, the Government withdrew this ability. We know that it supports a large range of people, as the noble Baroness laid out: the parents of young children, carers, disabled people and people with long-term illnesses. It enables them to come forward and represent their communities and encourages wider public participation, which is surely a good thing.

When we think about access to participation, why would the Government not lower barriers to that participation? Why can we not have virtual participation in council meetings as an option? We think that councils should have the flexibility to decide for themselves whether this is a useful tool that they can use. The noble Baroness, Lady McIntosh, also mentioned, as have others, the option that we have in this House for virtual participation by those with disabilities and health issues. As others have asked, why at the very least can we not have the same dispensation for local councils that we have here in this House? The Government need to look at this again. If the noble Baroness wishes to test the opinion of the House, we will support her.

[Earl Howe (Con)]

My Lords, this amendment seeks to replicate the situation created by the time-limited regulations that the Government made during the pandemic using powers in the Coronavirus Act 2020 that gave local authorities the flexibility to meet remotely or in hybrid form. Those regulations expired on 7 May 2021, and since that date all councils have reverted to in-person meetings. The Covid regulations, if I may refer to them in that way, were welcomed when they were issued for very good reasons, but they were nevertheless reflective of a unique moment in time, when a response to exceptional circumstances was needed. That moment has now passed, and the Government are firmly of the view that democracy must continue to be conducted face to face, as it has been for the last two years and for most of history prior to the pandemic.

Noble Lords have argued with some force as to the benefits of meeting remotely, and I completely understand why those arguments should be put forward. In the end, however, they are arguments based on one thing alone—expediency. With great respect, those arguments miss the point.

[Earl Howe (Con)]

My Lords, I greatly respect the noble Lord, but it is Report and I hope he will understand that point—but I am also coming on to the very point that he has raised. He is absolutely right about the expectations of the public.

I suggest that the point at the heart of this issue lies in one of the core principles of local democracy, which is that citizens are able to attend council meetings in person and to interact in person with their local representatives. To allow for a mechanism that denies citizens the ability to do this, ostensibly on grounds of convenience, is in fact to allow for a dilution of good governance and hence a dilution of democracy in its fullest sense.

Councils take decisions that can fundamentally alter the lives of people. Where an elected authority comes together to impose such changes, it should be prepared to meet in the presence of those whose lives are affected. I shall exaggerate a little to make a point, and I do not mean to cause offence to anyone—

[Baroness Hayman of Ullock (Lab)]

We have talked about having the same as here. We all meet together, but other people can come in.

Small and Medium-sized Housebuilders

Baroness Hayman of Ullock Excerpts

Wednesday 12th July 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

The noble Lord brings up a really important issue. I understand that other government departments apart from DLUHC are meeting the sector and working on this issue. We will deliver for the sector as soon as we possibly can.

[Baroness Hayman of Ullock (Lab)]

My Lords, securing planning permission is the major barrier to growth, according to 93% of SME builders. The Minister has mentioned the Levelling-up and Regeneration Bill a couple of times. In order to make a real difference quickly and promote the use of SMEs in local authority tenders, will she accept our Amendment 244, which asks local authorities to consider SMEs when granting planning permissions?

[Baroness Scott of Bybrook (Con)]

I can tell the noble Baroness that I will look at her amendment.

Levelling-up and Regeneration Bill

Baroness Hayman of Ullock Excerpts

Report stage
Tuesday 11th July 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, I beg to move.

[Baroness Hayman of Ullock (Lab)]

My Lords, before we begin Report, I want to make some points to draw the House’s attention to our concerns about the Government’s approach to the proper and timely legislative scrutiny of this Bill.

First, when we received the Bill into this House and prepared for Second Reading back in January, I and others were surprised to see that it contained three chapters that had not been scrutinised in the other place but had been added in after it had moved on to here. Then, following our debate in Committee, ahead of Report and with no prior warning, the Government added in a whole new schedule—nine pages in length—along with further amendments on childminding provisions, and altered the Long Title to reflect this.

I know that the Minister understands my concerns, and I thank her for arranging a meeting at short notice last week to discuss this. Can she now confirm, as we agreed in that meeting, that Committee rules will be used for the debate on the childcare amendments and any amendments to them on Report, and that, if deemed necessary, amendments will be accepted at Third Reading on this part of the Bill alone?

Finally, on Friday evening I had an email from the department apologising for the late tabling of further amendments, apparently to allow substantive discussions with the devolved Administrations prior to tabling as they relate to the devolution settlement and securing legislative consent for the Bill. Late discussions with the devolved Administrations unfortunately seem to have become a regular occurrence, but it would have been helpful if we had been made aware and alerted to any impact on timings in advance.

To be quite clear, I hold the Minister in the highest regard, I am not complaining about her as a Minister and we very much appreciated her apology. However, it greatly concerns me that the department has shown a lack of respect for the need to have proper legislative scrutiny from both Houses if we are to secure legislation of the expected highest standards.

[Baroness Pinnock (LD)]

My Lords, I fully endorse the sentiment expressed by the noble Baroness, Lady Hayman of Ullock. It is most unfortunate and not the responsibility of the Minister at all. She has been considerate and helpful with her time and that of her officials throughout our scrutiny of the Bill. Nevertheless, three chapters were added to an already very large Bill after it left the House of Commons, and then more than 150 amendments were tabled last week—some, as the noble Baroness, Lady Hayman, said, late on Friday. Then we find that a whole new schedule on childminding has been added and is so out of scope that the Bill’s Long Title has had to be altered.

The Levelling-up and Regeneration Bill, which is very important legislation to be considered by this House, is already being brought into a bit of disrepute by the addition of chapters, a new section altogether and amendments. I am sure the Minister feels as uncomfortable as we do about the way that this has been dealt with, but I wish to express my concern, as did the noble Baroness, Lady Hayman of Ullock..

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Moved by

[Baroness Hayman of Ullock]

1: Clause 1, page 1, line 6, after “Parliament” insert “within 30 days of the passing of this Act”
Member's explanatory statement
This amendment would require the statement to be laid within 30 days, meaning the statement could not be laid any later than the deadline for the statement detailing the application process for round three of the Levelling Up Fund which would, under a new Clause after Clause 5 also proposed by Baroness Hayman of Ullock, also have to be laid within 30 days of the Act being passed.

[Baroness Hayman of Ullock (Lab)]

My Lords, I have a number of amendments in this group, all regarding the funding for the levelling-up proposals that the Government have been working on for some time. One of the reasons I have brought this back at this stage is that I was not satisfied with the responses we received in Committee. Since we debated this matter in Committee —I think we started Committee back in February/ March; we seem to have been doing this Bill for a long time—the House of Commons Levelling Up, Housing and Communities Committee produced a report in May, Funding for Levelling Up. It expresses a number of concerns about the inadequacies of the Government’s method of delivering funding for levelling up, the allocation process and the extent to which different funds are compatible with the needs of communities in the short and long term. The committee also believes it creates several obstacles to delivering success in this area.

One concern that the committee raised in its report is about the lack of data available from DLUHC. DLUHC has conceded that it does not have sufficient data in relation to Whitehall departmental expenditure on the full range of levelling-up funds or on combined authority income or expenditure. Our concern is about how DLUHC can make significant policy decisions in relation to priority areas or funding allocations or even on the measurement of success or failure of this policy of levelling up. How can it achieve its objectives or measure those objectives if it is not given adequate data to support those tasks?

The White Paper commits DLUHC to reducing the requirements to access competitive funding and simplifying the funding landscape, so we are pleased that the department has recently announced measures to simplify the funding landscape for local authorities. However, this must be seen in conjunction with the fact that local authority revenue funding has reduced significantly since 2020.

Levelling-up funds generally do not replace grant funding because, first, they are capital not revenue and, secondly, they cover specific projects rather than necessarily covering the priorities of the local authorities.

We talked quite a bit in Committee about our concerns over metrics. There was questionable use of metrics in the first round, with additional metrics in the second round to make it easier. We feel that the management of the fund has ultimately contributed to diminished perceptions of trust and transparency, with this mismanagement leaving the Government open to criticism that they have not based funding decisions on need or, indeed, on merit.

The investment zone policy, for example, was reopened and reframed after it was reported that over 100 applications had been submitted for its first iteration. The problem is that, if there is a change in the approach and a reframing after submissions have been made, it means that the local authorities have wasted a significant amount of resources. We are concerned about that, and it raises further questions about the transparency of the process that DLUHC has been applying to such funding initiatives.

Funding the implementation of the levelling-up policy is clearly complex and challenging; we recognise that. Further parts of the report say that DLUHC does not know which pots of money across government contribute to levelling up, and nor does DLUHC appear to have oversight of how these objectives can be delivered strategically through—importantly—departmental co-ordination.

As a result, the Government’s current approach is characterised by one-off, short-term initiatives, which we think will be insufficient if the geographic, economic, social and health inequalities are to be reduced and, ultimately, overcome. To change this, we believe the policy requires a long-term, substantive strategy and funding approach: things that it currently lacks. Without this, levelling up risks joining a number of other short- term government initiatives.

In light of the committee report’s findings, I would ask the Minister and noble Lords to support my amendments in this group, which ask that the third round of the levelling-up fund takes place in both a timely manner and as part of a reformed process. If the Minister is unable to do so, I am minded to test the opinion of the House on this matter, because we believe that proper use of the levelling-up fund and other funding is one of the key drivers as to whether the ambitions in this Bill will actually be achieved.

Very briefly, my noble friend Lord Berkeley has an amendment in this group regarding an issue that has come up in the negotiations between the Department for Transport and the Isles of Scilly Council and the steamship company. I will let my noble friend explain the detail of his amendment and his deeply held concerns. I want to assure him that we very much support his position. I hope that the Minister will listen carefully and work with him to find a solution going forward. I beg to move.

[Lord Berkeley (Lab)]

My Lords, I thank my noble friend for that introduction. It is my job to speak to Amendment 11 in my name. It has a rather odd objective, which might not be clear from the text: I am trying to help the Government to honour their very welcome commitment to a levelling-up grant of about £48 million which they have offered to the Isles of Scilly Council to supply new vessels for the journey to the mainland. Unfortunately—we discussed this in Committee—new information came to light last week which prompted me to put this amendment down.

As I said, the department offered £48 million to the council on the basis that the council would have control of the fares, the timetable and the freight costs, and would put out to tender the operation of building a ship and the service. Noble Lords will probably be interested to know that Transport Focus did some market research earlier this year, which showed almost unanimous support from the 2,500 islanders for the idea of having a competition to get the most efficient and best value for money service, rather than just continuing with the existing operator, which has been there for many years. Many people think that it needs to be subject to competition.

The operator, the Isles of Scilly Steamship Company, asked whether it could have half of the £48 million without competing in a tender because, it said, it was a very good company. Ministers rejected that, thank goodness, in a very robust way. I could quote from the letter of the noble Baroness, Lady Vere, but I do not think I need to. She and her colleagues are being very supportive of the concept of levelling up to get the best possible deal for the fares and the service quality for passengers and freight for the people who live on the Isles of Scilly.

The trouble is that the existing operator has now announced that it wants to go ahead and finance its own ship, without saying what the fares or the timetable will be. Will it run in the winter, for example? If you are going to raise £48 million or so in the private sector, that will of course put the fares up—but the operator will not tell us what the fares are going to be. Over the weekend, we have done a few calculations of what the fares might be and compared them with those for journeys of a similar distance from the mainland of Scotland to Islay, which some noble Lords will probably know. It is actually quite frightening, so perhaps I might offer a few examples.

Since 2012, which is 11 years ago, the fares to Scilly have gone up by 47%—I repeat, 47%—and, when compared with those for Islay, the difference is getting more and more. It was seven times different; it is now going to be 12 times different. I will quote just one figure. In 2027, which is in four years’ time, a return fare for a passenger to and from Scilly, with no car, will probably be about £204—£204 for one person to get to the Isles of Scilly and back. Think of taking a family there. If there was a husband, wife and two kids they would be almost broke before they got there. It is lovely when you get there—I love it—but the equivalent fare if you are going to Islay is £16.

I was very pleased to hear from the Minister, the noble Baroness, Lady Vere, who wrote to me and said:

“I am concerned about the potential impact on fares and freight charges”


from the steamship company

“and the consequential impact for islanders”.

The department offered £48 million to fund the new vessels, but it cannot really go ahead and give the money, even on a tendering basis, if somebody else is trying to build a ferry at the same time and operate the same route. If it does manage it, the fares will be, as I said, over £100 for a single, and that is all contrary to the Minister’s wish to see levelling up applied to the Isles of Scilly.

In this amendment, I have attempted to come up with an idea that would frustrate any other operator trying to compete with what the Government are so generously offering, in their £48 million for what the islanders need, to ensure that the harbour authorities and the council would not be able to give this company permissions—there are plenty of permissions that we all know.

I am sure that the wording is wrong, as the Minister will probably tell me quite soon. But this is an attempt not to save the Government from themselves but to save their wonderful commitment to the Isles of Scilly from being debunked, irritated or cancelled, for very good reasons—Treasury rules and everything. If the Minister is interested in keeping this going—I hope she is—I would be very pleased to sit down and talk with her at some time before Third Reading. If that were possible, one of us could come up with an amendment, at Third Reading, that would hopefully work.

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[Baroness Scott of Bybrook (Con)]

I think the House prefers not to have any amendments at Third Reading.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank noble Lords who have spoken in this brief debate, and the Minister for her, as always, very thorough response. However, I do not think that she has been able to demonstrate categorically that any future funding rounds are going to be properly tied to the delivery of the missions. The Government seem to have taken a bit of a scattergun approach to this, if I can put it like that. As I have already said, the Government’s approach is categorised by one-off, short-term initiatives which are insufficient if the geographic, economic, social and health inequalities are to be reduced and ultimately overcome, which is what the Bill aims to do.

To me, as I said before, getting the funding allocations correct, getting the analysis of the results of previous allocations of funding correct, and having that information and data at our fingertips to be able to properly target the funding to ensure that we get the outcomes we want, is critical to the success of the Bill. I take the point made by the noble Lord, Lord Lansley, but I have been informed by the clerks that my Amendment 17 is consequential on my Amendment 1. So I thank the Minister, but I am not satisfied with the Government’s future approach, so I would like to test the opinion of the House on my Amendment 1.

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[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in the debate on these amendments. In doing so, I declare my financial services and technology interests as set out in the register.

We are talking about levelling up, which can really be reduced to enabling human talent, yet two of the key enablers of that talent get scarce a mention in the many pages of the Bill: regional finance, and all the new technologies that I believe can do so much to help in this overall and overarching levelling-up mission. That is why I have brought back Amendment 14 on the underuse of robots throughout manufacturing, the country and our production processes.

My question to my noble friend the Minister is simply this: when we consider the UK’s robots per 10,000 of the workforce, the issues we have on growth, which would lead to levelling up, and the multiple roles—economic, social and psychological—in which robots are already being deployed around the world in comparable nations and economies, does she recognise that we need a robotics task force? We need to unleash a community of robots to assist in this levelling-up mission, which will be of benefit right across the United Kingdom. With the ability to deploy robots into the economy and society, it can be done in a far quicker and far more economically, socially and psychologically effective way than some of the measures currently set out in the Bill.

[Baroness Hayman of Ullock (Lab)]

My Lords, I have one amendment in this group, Amendment 12. It asks for an evaluation of progress towards each mission from an independent advisory council, to include the variances of delivery between different nations and regions—the geographical disparities that we have heard about from other noble Lords in this debate.

As I said in Committee, where we had a similar amendment, we believe that independent oversight enables good governance and good government. Clear, trusted and impartial analysis makes for better policy decisions. It delivers far better outcomes, and it can be only a good thing for our democracy. An independent body such as this can also ensure that progress in the development of the missions is being monitored on the road to being achieved. One of the things that concerned noble Lords throughout Committee and now on Report is that it is all very well having missions written down, but how do you achieve them and how do you monitor that progress? We already have good examples of independent scrutiny within government. The Office for Budget Responsibility is one example, and the Select Committees that sit here and in the other place also do independent scrutiny and provide advice and recommendations.

I am aware that in Committee the Minister said in answer to my proposals on an independent advisory council that scrutiny is in place through the Levelling Up Advisory Council. I appreciate that such a council could provide scrutiny, but where is the proper, clear independence in where it sits and how it reports? On the understanding that the Minister is going to mention that again, I ask her what reassurance she can provide that it is the Government’s clear intention that this council will be fully independent and that that independence can be demonstrated and achieved.

I will comment on some of the other amendments in this group, and I thank noble Lords who have introduced them today. When he moved Amendment 2, the noble Lord, Lord Lansley, made some extremely good points about the timescales. When we look at the length of time before we see some of these reports, things can change an awful lot, not just with government but with policy and priorities. We were both involved in the debates on the Procurement Bill, for our sins, and we made progress on some of these kinds of issues in that Bill. I hope that the Minister has listened carefully to some of the arguments put forward by the noble Lord, because it is important that Parliament gets the opportunity to consider the statement and to have a look at whether it thinks it is the correct statement for the time or whether changes need to be made—or it needs to be started over again, for that matter. The noble Lord made very important points.

I turn to the amendment in the name of the noble Lord, Lord Shipley. It is of course important for Parliament to be able to debate the missions, but he came back to the question of how successful government is on delivery, or otherwise for that matter. That is one of the core areas of concern coming through in our debates when we look at missions and even the term “levelling up”.

The noble Lord also made the important point that this is about cross-departmental delivery, priorities and funding. We all know that government likes to work in silos, in individual departments; it is not straightforward. Even when I was in the shadow Cabinet—so looking at this from the shadow perspective—it was not easy to get cross-departmental working in the long term, although you could do it on short-term issues. This will be critical if we are going to deliver, so his amendment looking at the indicators of how we can achieve cross-departmental working is really important. I assure him that, if he wishes to test the opinion of the House on this matter, he will have our support.

I turn to the amendment in the name of the noble Lord, Lord Foster of Bath. He very clearly laid out why his amendment is needed. As someone who has spent their life living in rural communities and was brought up in a rural community, he does not have to convince me. Every Government seems to talk about rural proofing to ensure that rural areas are considered, yet the concept as it has been formatted, both previously and now, has clearly failed. Had it been successful, we would not have so many existing challenges facing our rural communities.

We know that rural communities are being hit hard. My area in Cumbria is a good example of this: young people leave to seek better opportunities, older people move in to retire and then you have what they call “super ageing” rural communities without so many young people to work in them. It is therefore harder to deliver care and support for an ageing community. We also know that there have been cuts to rural police services, and we hear that houses in rural areas are less affordable, yet these areas have twice the proportion of officially “non-decent” homes as compared with suburban residential areas.

We talk about rural proofing in relation to the impact of policies on rural areas. I think we are looking at it from the wrong end of the telescope. Policies should be developed for rural communities in the first place, reflecting the challenges that we face. If are going to rural-proof properly, we need to do both. I have probably said enough on this, but I am sure noble Lords have gathered that, if the noble Lord, Lord Foster, wishes to test the opinion of the House, we will be very happy to support his amendment.

Finally, on the amendment in the name of the noble Lord, Lord Holmes, as we said in Committee, he is absolutely right to raise the potential of robotics to assist with the levelling-up missions. It is an opportunity that we should not miss, and which could also provide jobs in this country—much-needed jobs in skilled work. I hope that the Government will work further with the noble Lord, Lord Holmes, on how this could be achieved.

[Lord Curry of Kirkharle (CB)]

My Lords, I rise to support a number of amendments in this group. I absolutely endorse the comments of the noble Lord, Lord Shipley, in identifying disparities that should be taken into account when we assess the impact of this levelling-up Bill, and taking action as a consequence seems to make logical sense. I particularly support the comments of the noble Lords, Lord Foster and Lord Carrington, and the amendments that they have tabled on rural proofing. I share the frustration of the noble Lord, Lord Foster, in having cantered round this course so many times before without having had a satisfactory conclusion.

This is no way a reflection on the efforts of the noble Lord, Lord Benyon, but because the responsibility for rural proofing currently lies with Defra, its influence within government as a whole is very limited. Yet it is essential that the whole of government engages in the rural-proofing agenda, which is why it is important that this item is discussed and considered within the Bill, so that it is seen as a government responsibility to deliver rural proofing.

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[Baroness Scott of Bybrook (Con)]

My Lords, a number of proofings have been done on the Bill. I will ask for those and make sure that they are brought forward. It is not about giving money; it is about knowing where money is required in rural areas to make life better for people, as well as making sure that policies are rural-proofed. If we find out through that rural-proofing that some policies are not delivering as well as they could for rural areas, we have to do something about it, and that is what the Government are doing.

[Baroness Hayman of Ullock (Lab)]

Before the Minister sits down, if the policies have been rural-proofed, what happened to the metrics? Clearly, they have not been rural-proofed. I raised public transport, which I think needs looking at.

[Lord Lansley (Con)]

My Lords, I am grateful to all noble Lords who have spoken to this group on a range of issues. We have had some of these debates before. As far as the independent Levelling Up Advisory Council is concerned, we had that debate in Committee. We are now five months on, and we asked then for there to be greater transparency around its work and the advice that it gives, but we have not yet seen it. I hope my noble friend the Minister might take away from this debate that, when it comes to the point of issuing a report on the levelling-up missions, it will include—as is done for the Budget, for example, by the OBR—an independent assessment by the advisory council for the purposes of transparency. For it to work wholly within government and never see the light of day does not strike me as terribly independent, so I hope we see that change.

The point about public transport and rural-proofing was well made. The idea that the metric on public transport is how close one gets to the way that public transport works in London is hardly a basis for comparison or for the measurement of public transport connectivity in rural areas, but hey ho. The point is a good one: getting it into the metrics is potentially more important than including it in the reporting process. That is exactly why parliamentary scrutiny of the statements is important, not just parliamentary scrutiny of the reports of the missions after the passage of time.

None the less, I take my noble friend’s point about the flaw in my argument, which is a very simple one. We spent a lot of time debating the statement on the levelling-up missions, because the missions were published before the Bill was received. We spent a lot of time debating what is in them and what the alternatives might be; so far, so good.

In the next Parliament, we will no doubt have a new statement on the levelling-up missions at some point. It will be very interesting to see that and, following the points made by my noble friends and opposition Front-Benchers, in Committee and today on Report, I hope that there will be opportunities for debate when the statement is laid. That is especially true of and relevant in the other place. If there are objections and a desire for a debate, I hope that the Ministers will accept and understand that.

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Devolution to the lowest common denominator must be the answer because it means that the electorate have the last say and can therefore make the difference in how that money is spent. It will help to deliver levelling up. I support the amendments.

[Baroness Hayman of Ullock (Lab)]

My Lords, I just want to say that we also welcome these amendments and that I support everything that the noble and learned Lord, Lord Thomas of Cwmgiedd, said.

[Earl Howe (Con)]

My Lords, I am extremely grateful to the noble and learned Lords, Lord Thomas of Cwmgiedd and Lord Hope of Craighead, as well as to my noble friends the Duke of Montrose and Lady O’Neill, in addition to noble Lords opposite.

The levelling-up missions have been set by the UK Government but outcomes are a shared interest for the whole of the UK. We fully recognise that some of the missions cover areas where public services are devolved. The purpose of the missions is not to alter existing areas of responsibility but rather to align and co-ordinate how different areas of government work towards a common goal. As I have mentioned, work is already under way between officials in the UK Government and devolved Administrations to explore collaborative work on various missions.

However, what I want to stress is the point well made by the noble and learned Lord, Lord Thomas of Cwmgiedd, about working together across the union. We are committed to working with the devolved Administrations to align policy, and towards a goal shared by everyone: to reduce geographic disparities across all of the UK. These amendments provide further assurance of that commitment by making it explicit and binding in the Bill.

To pick up a further point raised by the noble and learned Lord, we are taking specific action in Scotland, Wales and Northern Ireland, including putting local voices at the heart of decision-making through the UK shared prosperity fund, launching an innovation accelerator in Glasgow City Region and establishing a UK national academy to provide a first-class education to all children in the UK.

My noble friend the Duke of Montrose spoke about establishing a framework. My best response to that is that one of the benefits of devolution is that it allows local places to take tailored approaches to tackling common challenges, enabling experimentation and innovation. We want to do more to bring together evidence and insights from across the UK, learning from our different approaches and experiences, so that we can improve our collective evidence base about what works and what does not work in different contexts. That, to my mind, is a win-win and it could be described as a desire to establish, over time, a framework that works for everybody. Ultimately, working together to improve our collective evidence base will help us all deliver better outcomes for people across the UK.

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Moved by

[Baroness Hayman of Ullock]

17: After Clause 5, insert the following new Clause—
“Levelling Up Fund: round three(1) Within 30 days of the passing of this Act, the Secretary of State must lay a statement before each House of Parliament detailing the application process for round three of the Levelling Up Fund, including criteria for applications.(2) The Secretary of State must take steps to simplify the application process and reduce the requirements, and resources necessary, for applications.(3) The Secretary of State may not introduce additional criteria for applications after the publication of the statement being laid under subsection (1).(4) Within 60 days of the statement being laid under subsection (1), the Secretary of State must lay a statement before each House of Parliament listing the allocations of the third round of the Levelling Up Fund and explaining how each allocation supports the delivery of the levelling-up missions.(5) In determining the allocations, the Secretary of State must only make allocations which support the delivery of the levelling-up missions with a long-term and strategic vision.(6) The Secretary of State must not make allocations which are based on political and electoral motivations. (7) A Minister of the Crown must provide feedback on unsuccessful applications.”Member’s explanatory statement
This amendment aims to ensure that the third round of the Levelling Up Fund takes place in a timely manner and as part of a reformed process.

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Moved by

[Baroness Hayman of Ullock]

18: After Clause 5, insert the following new Clause—
“Capital spending: impact assessmentWithin 60 days of the passing of this Act, a Minister of the Crown must publish an assessment of the impact of the requirement that the Department for Levelling Up, Housing and Communities seeks consent from His Majesty’s Treasury for all capital spending, on the delivery of Part One of this Act.”Member’s explanatory statement
This is to probe reports that DLUHC require Treasury consent for all capital spending.

[Baroness Hayman of Ullock (Lab)]

My Lords, this is a short group with just my Amendment 18 in it. I have laid this amendment to probe the reports that the department, DLUHC, now requires Treasury consent for its capital spending. In February this year, the Financial Times published an article stating that DLUHC had been “banned” by the Treasury

“from making spending decisions on new capital projects … after concerns were raised about the ministry’s ability to deliver value for money”.

Lee Rowley MP, a Parliamentary Under-Secretary of State for DLUHC, confirmed to the House of Commons that the department was now

“working within a new delegation approach”

that involved

“Treasury sign-off on capital spend.”—[Official Report, Commons, 9/2/23; col. 1028.]

Furthermore, in March it was reported that DLUHC had not managed to spend even 10% of the levelling-up fund since its launch in 2020. This media report closely followed news in the Financial Times that

“DLUHC intends to spend £2.42bn less on capital projects in 2022-23 than originally planned”.


This sum includes £1 billion in unspent money from the affordable homes programme, while two government officials the article quoted said that the level of underspend “was unusually high”. Can the Minister give an explanation as to what the ban on capital spend sign-off means for the future of levelling-up projects? It is apparent that the Treasury must have serious concerns regarding the department’s ability to monitor and deliver as it now has to work with the Treasury to seek all necessary approvals.

The department has also acknowledged that it lacks data of sufficient quality about government departments’ expenditure on the full range of levelling-up funds. It also lacks data on combined authority income and expenditure. Can the Minister say how DLUHC intends to measure the success or failure of its levelling-up policies, initiatives and objectives? DLUHC’s solution to the lack of data appears to be the creation of the spatial data unit, the SDU. Having said that, it is unclear exactly what data will be produced and by when. Perhaps the Minister can shed some light on this.

The delay and lack of information regarding what the SDU is working on, what the unit intends to produce and when these datasets will be available are clearly unsatisfactory. Does the Minister think that this is a good use of public resources? For levelling up to be a success, it requires a long-term strategy with a long-term funding plan backed by data, and this is currently not the case. For the Treasury to take the step of coming in and removing DLUHC’s ability to sign off on capital expenditure is extremely concerning.

My amendment seeks fundamentally to understand what impact this will have on the delivery of future DLUHC-funded projects, particularly future funding under the levelling-up policy. I await the Minister’s response with interest.

[Baroness Pinnock (LD)]

My Lords, Amendment 18 is a new probing amendment, because we all assumed that, if the Government are committed to levelling up and understand, as they will, that it is dependent on long-term capital investment, that would therefore be available.

The noble Baroness, Lady Hayman of Ullock, quoted the Financial Times, and I too did a bit of research on what capital was around. The Financial Times raised this issue earlier this year, reporting that John Glen, who was then Chief Secretary to the Treasury—perhaps he still is—has

“now stepped in to prevent DLUHC from signing off spending on any new capital projects, because of concerns about whether the department is delivering value for money. Such interventions are typically reserved for departments about which the Treasury has particular financial concerns”.

The Financial Times report went on to say:

“The decision to rein in Gove’s expenditure, taken last week, means that any new capital spending decision ‘however small, must now be referred to HMT before approval and the department is not allowed to make any decisions itself’”.


It is a fairly damning indictment of the spending already undertaken by DLUHC if that is the Treasury’s view of its value for money. As I said at the start, levelling up depends on capital investment. It is difficult to interpret the Government’s—the Treasury’s—decision to have tight controls on capital spending as anything other than putting a big brake on levelling-up funding, to the detriment of communities that are desperate for investment.

A House of Commons Select Committee also reported on levelling-up funds, which we referred to in debates on earlier groups today. It made the salient point that the Department for Levelling Up, Housing and Communities is apparently not able to demonstrate how the funding fulfils the aims of the White Paper for sustained investment to tackle long-standing inequality—these are the points that I have made today and throughout the debates on the Bill. That was a cross-party committee. The National Audit Office also published a report, making a similar, stark plea to the department to urgently increase the capacity to assess and manage levelling-up funds.

So here we are, with a significant Bill carrying one of the Government’s key objectives, set out in a detailed report, and before it has really got going the Treasury is saying, “Well, you can’t spend anything without us first checking and signing it off”. We also have researched reports from the House of Commons Select Committee and the National Audit Office, both pointing to funding not being spent in perhaps the best possible way.

So the noble Baroness, Lady Hayman, has posed an important question. We ought to hear from the Minister that the Government are prepared to continue to invest significant sums in levelling up because, without that, levelling up will not occur. You can tell that from the White Paper, which I keep pointing to—it has done its job. Unless there is investment, levelling up will not happen. If the Treasury is putting a big brake on it, how are we going to level up? Perhaps the Minister can give us some pointers.

[Baroness Scott of Bybrook (Con)]

Amendment 18 in the name of the noble Baroness, Lady Hayman of Ullock, relates to officials publishing an assessment of the impact of the requirement that the Department for Levelling Up, Housing and Communities seeks consent from His Majesty’s Treasury for all capital spending on the delivery of Part 1 of this Bill when it becomes an Act.

Noble Lords will be aware that the department is working within a new delegation approach, which involves Treasury sign-off on new capital spend. However, there has been no change to the budgets of the Department for Levelling Up, Housing and Communities, and no change to our policy objectives. It is reported that the Department for Levelling Up, Housing and Communities requires approval from His Majesty’s Treasury for new capital projects, but this will not impact the levelling-up agenda. The recent change relates only to new projects; there is no change to the decision-making framework for existing capital programmes and no change to the department’s budgets. Moreover, noble Lords will be aware that, in the usual course of departmental business, the majority of programmes would require HMT approval in any case, so there is little change with this new capital spending approach.

The noble Baroness, Lady Hayman of Ullock, asked what implications the new spending control would have on the levelling-up agenda. The amendment to capital delegations referred to in press coverage has absolutely no implications for the Government’s policy agenda. The Government’s central mission remains to level up every part of the UK by spreading opportunity, empowering local leaders and improving public services. There has been no dilution of levelling up. There have been no changes to the size of DLUHC budgets, both capital and revenue, or to its policy objectives; neither does this impact how large programmes already agreed are being delivered—for example, the towns fund or the levelling-up fund.

I hope this gives the noble Baroness, Lady Hayman of Ullock, enough reassurance that she will not press her amendment.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Pinnock, for her comments in this debate and the Minister for her response. Although I am not absolutely and entirely convinced by everything she said, I beg leave to withdraw my amendment.

Amendment 18 withdrawn.

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Moved by

[Baroness Hayman of Ullock]

25: Clause 7, page 7, line 7, at end insert—
“(4A) The Secretary of State must consult, and have regard to advice provided by, the Boundary Commission for England regarding the boundaries of a CCA when making regulations under subsection (1).”Member's explanatory statement
This means that the Secretary of State has a duty to consult the Boundary Commission in regard to the boundaries of a CCA.

[Baroness Hayman of Ullock (Lab)]

My Lords, I have a number of amendments in this group, as do other noble Lords. I shall talk your Lordships’ House through why I felt we needed to put these amendments down.

First, let us look at my Amendments 25, 27 and 53. Our concerns are around the fact that the Government seem to view devolution settlements as evolutionary. Although we do not necessarily object to them refining these agreements over time, our concern is that, if they are going to refine them and the settlements are going to evolve, clearly they need to be changed both for the benefit of and with the consent of the local communities that will be affected by any changes. If we look at what is in this part of the Bill and what it does, we see that it adjusts the mechanisms affecting when changes to combined authorities can be made. With my amendments, I am trying to ensure that due process is applied at all times to such changes.

I want to look at one particular area of concern, which involves a change that could be immediate and will be able to be exercised through these powers if they are put into statute: the potential addition of Warwickshire to the West Midlands combined authority. This could be done shortly ahead of the next election for the mayor of the region in May next year. Our concern is that it could happen shortly ahead of an election without proper agreement with the community and wider authorities. Because of that, I have tabled Amendments 25, 27 and 53.

My Amendment 25 states:

“The Secretary of State must consult, and have regard to advice provided by, the Boundary Commission for England regarding the boundaries of a CCA when making regulations under subsection (1)”.


My Amendment 27 says the same—it is just placed in a further, appropriate part of the Bill—whereas, if noble Lords look at my Amendment 53, they will see that it looks at another part of the Bill and aims to ensure that

“the Secretary of State has consulted, and had regard to advice provided by, the Boundary Commission for England”.

I know that we have discussed this issue. I thanked the Minister for her time either last week or the week before—I cannot remember when—when we discussed it previously. However, because the Boundary Commission has a responsibility to review parliamentary constituencies —I know that the argument from officials was that my amendment does not necessarily apply in this case because it looks just at county or district boundaries that already exist and are already agreed, for example— we feel that, because of the potential implications of boundaries being expanded by a mayor to suit their next election, this is something that should be supplemented. There should be this additional role for the Boundary Commission in such cases so that there cannot be any questions, concerns or even accusations of gerrymandering where that may not be the case; we just think that it would add an extra layer of security and transparency to any changes in this area.

My Amendment 35, which is also in this group, would insert a new clause:

“Mayors for CCA Areas: boundaries”.


The amendment says:

“Within one year of the day on which this Act is passed, a Minister … must publish a report of a consultation on the boundaries of each Mayor for a CCA Area … The report must also include a criteria which must be fulfilled for any future expansions of boundaries”.


Also, and this comes back to the point I have just made:

“The criteria must include that the extension is not being made for political advantage”.


This is something that we are concerned about.

We are trying to really stress the point here that any additions and changes to boundaries should not be motivated or be able to be motivated by any political purpose. We know that concerns have been raised that this may be the case in the West Midlands, for example. It is extremely important that the Government heed these concerns in order that people can have the greatest confidence possible in any changes to boundaries and powers that will be brought in with the proposed legislation.

The noble Lord, Lord Shipley, has Amendments 37 to 39 in this group. They all look to do a similar thing: to remove Clauses 40 to 42 to avoid confusion about the number of different mayoral titles that are possible. I genuinely think he has a bit of a point here. I find that many members of the general public get confused about what councillors do and what we all do. When I was a Member of Parliament—other noble Lords may have had the same experience—I was told to go and sort my councillors out. There is not necessarily a huge amount of understanding about local government and government structures. I have some sympathy with what the noble Lord is trying to do here to make it as simple as possible.

I now want to look at Amendment 52 in the name of my noble friend Lord Hunt, my Amendment 53, as I mentioned earlier, and Amendment 53A, the new amendment in the name of my noble friend Lord Hunt to which I have added my name. I will leave my noble friend to go into the detail of this, but we strongly support what he is trying to achieve with this amendment and strongly support his concerns here.

I hope that I have been clear to the Minister about exactly what our concerns are. I think that they could be resolved with discussion, but these are genuine concerns about the way the boundaries may potentially be manipulated and we think that the Government should take them very seriously. I beg to move.

[Lord Hunt of Kings Heath (Lab)]

My Lords, as my noble friend said, I have two amendments. Amendment 52

“would prevent the Secretary of State making amendments to the membership of a combined authority in a 12 month period running up to a mayoral election, which could have the effect of altering the prospects of a sitting or proposed mayor being elected or re-elected”.

Amendment 53A puts some

“additional requirements which must be satisfied before local government areas are added to an existing Combined Authority within nine months of Royal Assent”.

Obviously, it is late and noble Lords wish to prepare for tomorrow, so I am not going to speak at length, as I could do on this. I just want to make two or three points. This is all about the Government’s deplorable efforts basically to gerrymander the boundary of the West Midlands Combined Authority. So much does the current Tory incumbent, Andy Street, suspect defeat in ten months’ time that he has conspired with Michael Gove to shoehorn Warwickshire, a shire county, into the metropolitan combined authority. If this happened to Wiltshire, for instance, I know exactly what the noble Baroness would be thinking. The sole purpose, of course, is to try to improve his fortunes at the 2024 election. He has similar designs on some of the other shire counties in the West Midlands. He will not be stopping there; he wants to be police commissioner as well, and we will come on to that later.

This is being done over the next 12 weeks, so there is scant time for consultation, and no time for full consideration of the impact on the district council and certainly not on the public, who I doubt wish to have their lives run from Birmingham. Nor do I think it will be successful, because the most likely outcome is a Labour mayor running Warwickshire and the West Midlands. Noble Lords might think that I would welcome that, but I have principled objections to using legislation in this way—basically, to protect a sole political incumbent. I particularly object to this happening without the agreement of the existing constituent members of the combined authority. For me, such power vested in one person damages our democracy, undermines the trust on which the combined authority was established and surely risks threatening its future success.

One of the things I find the most objectionable is the haste in which this is being done. A paper going to Warwickshire County Council’s cabinet meeting tomorrow indicates this. The council has to rush into a governance review, followed by publication of a scheme that would contain details of the proposed expanded area of the West Midlands Combined Authority; its proposed membership, voting and other constitutional arrangements; its proposed functions; the way it will be funded; and any property, rights and liabilities that would be transferred to the extended combined authority.

A public consultation has to be undertaken. If the Secretary of State then decides to proceed, an order will have to be made which would expand the area of the combined authority and provide for the election of a mayor. This all has to be done incredibly quickly. Ministers have told the county council that it must be in a position to do all that and submit an application in early October. Allowing for August and the summer break, what sort of consultation is likely by early October? I suggest, a very scanty one.

In this paper, the council openly admits that it may require consideration of urgent decisions being made during the process; in other words, the consultation is a sham, because the decision has already been made. So much is unknown, not least the financial consequences; so the cabinet paper airily says that what this means financially for Warwickshire in the context of the current West Midlands devolution deal and the being-discussed West Midlands deeper devolution deal would need to be worked up in negotiation with the Government. So that will not be sorted out any time soon, and the public in Warwickshire will have no idea at all about the financial implications; nor will the non-metropolitan district councils in Warwickshire have any idea what it means for them, or of the financial consequences.

The paper that I have read is mistaken. It says in paragraph 2.7:

“A change in membership status to ‘constituent member’ for Warwickshire County Council”


—in other words, Warwickshire coming in means it becomes a constituent member of the combined authority—

“would also have implications for the five District and Borough Councils in the County who would automatically be admitted as constituent members”

of the combined authority. The paper goes on to say:

“It is recognised that the level of financial contribution as a constituent member could be challenging for the District and Borough Councils and if levied at the current ‘constituent member’ level would mean Warwickshire Councils as a whole contributing a disproportionate amount compared to other members”.


Well, that would be a matter of concern. I am sure that this, if successful, would have financial consequences for the non-metropolitan district councils. But the paper is wrong. Again, in paragraph 4.16, it says that district councils will be constituent members of the combined authority.

I take the Minister back to our debates on district councils. The noble Earl, Lord Howe, made it clear that

“the combined county authority is a new institutional model made up of upper-tier local authorities only. Only two-tier county councils and unitary councils can be constituent members of a CCA”.—[Official Report, 27/2/23; col. 111.]

I suspect that this error was made in the rush to produce all this paper, but a district council in Warwickshire would be left very uncertain about what all this means.

We can see a proud, independent and delightful county, Warwickshire—I am a member of Warwickshire County Cricket Club—being more and more absorbed into the West Midlands Combined Authority, where urban interests are bound to dominate. Do the people of Warwickshire really want this? Do other shire counties and the people in them want it? I very much doubt it.

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[Baroness Scott of Bybrook (Con)]

My Lords, Amendments 25, 27, 35 and 53, tabled by the noble Baroness, Lady Hayman of Ullock, regard the boundaries and memberships of CCAs and combined authorities. The Bill includes our intended criteria for establishing and changing boundaries of CCAs and CAs in Clauses 44, 46, 62 and 63.

Proposals to change the area of a combined county area are generated locally in line with our principle of locally led devolution. The process to propose a boundary change must include a public consultation being undertaken. The Secretary of State has to assess any such proposals, including the results of the consultation, against a set of statutory tests and will consent to making the requisite secondary legislation only if they are content that the statutory tests are met. The legislation is therefore subject to a triple lock of agreement from the Secretary of State, the consent of the local area and parliamentary approval. I think it is important that we look at that as a triple lock.

Any proposal from the local area has to demonstrate that it will improve the economic, social and environmental well-being of some or all of the people who live and work in the area, suitably reflecting their identities and the interests of local communities, and will deliver effective and convenient local government. As such, the expansion of a CCA or CA cannot be pursued for political advantage. It must benefit the local area.

[Baroness Hayman of Ullock (Lab)]

I want to ask for clarification. The test is to carry out a consultation. When the Secretary of State takes that consultation with the local community into account, can he make a decision against what the majority of that community voted for?

[Baroness Scott of Bybrook (Con)]

It is more complex than that. It is not a referendum but a consultation. Therefore, there will be many views for, against, in the middle and all over the place, but he will obviously have to take account of views. If everyone said they did not want something, I am sure the Secretary of State would take note of that; it is part of those tests.

The main focus of the Local Government Boundary Commission for England, which the noble Baroness brought up, is a rolling programme of electoral reviews of local authorities; this is where its skills and experience mainly lie. It would not be appropriate to consult it on the proposed boundaries of CCAs and CAs. The requirement for public consultation and statutory tests for regulations provide, we believe, sufficient protection that further consultation is unnecessary. For these reasons, I hope the noble Baroness will not press her amendments.

Amendments 37 to 39 in the name of the noble Lord, Lord Shipley, seek to remove Clauses 40 to 42, which set out the process to allow the mayor of a CCA to change to a locally appropriate title that resonates with local stakeholders. Some areas are reluctant to adopt a mayor governance model as they feel the word “mayor” would be confusing and inappropriate for their area, preventing access to a strong devolution deal.

We had this discussion in Committee. There are many areas in this country where every town in a county, or even a district, will have a local mayor. That has been an issue for some authorities when they look into a CCA for the future. The noble Lord talked about directly elected leaders. Some authorities have said to us that they would prefer to call the person who leads—doing the same job as a mayor in a county authority—a “directly elected leader”. It is just a name; the job itself is the same.

To minimise confusion, the clauses include the protection of a shortlist of possible titles—it does not have to be used; it just gives some ideas—as well as a mechanism for areas to use any other title they choose, providing they have regard to other public officeholders’ titles in the area of that authority. We are trying to give as much local flexibility as possible to allow for local circumstances, so that the name of the directly elected person to lead that combined authority is the best name to use in that area.

Amendment 52, also in the name of the noble Lord, Lord Hunt of Kings Heath, regarding the timing of an order changing a combined authority’s area, would add further inflexibility to the process. An MCA can be expanded only at the time of a mayoral election, for reasons of democratic accountability; those affected by the mayor’s decisions will have had the opportunity to take part in that mayor’s election. Consequently, it can already be several years between an area expressing an interest in joining an MCA and such expansion coming into force. Introducing additional inflexibility would impede and potentially further delay—

[Lord Hunt of Kings Heath (Lab)]

My Lords, I will not delay the House for long but, with the greatest respect, this was a twinkle in the eye of Mayor Street a few months ago when the Wolverhampton Express & Star reported it. People in Warwickshire were innocently going about their own business, then along came Mr Gove to put pressure on them to make this application. The Minister is indulging in a fantasy that this is somehow driven by Warwickshire people desperate to join the West Midlands.

I joke about Wiltshire but the Minister will know about the sensitivities of shire counties and their relationship with urban metropolitan districts, which I well understand. My noble friend Lady Anderson’s Staffordshire would be another case in point; it would not wish to be ruled, in a sense, from Birmingham. It really is too much: the rules are being changed to allow for one gerrymander, in a foolish attempt to save Mr Street’s political career. That really will not do.

I am not going to go on because we have two other groups. In the next—

[Baroness Hayman of Ullock (Lab)]

We are finishing at the end of this group.

[Lord Hunt of Kings Heath (Lab)]

Sorry, I know that, but we are going to have further debates on this because the amendments have been split between groups eight, nine and 10. That is why I will sit down.

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[Baroness Scott of Bybrook (Con)]

My Lords, as we have said before, there are clear regulations that the Secretary of State will look at when he considers any bid. We have made it clear that they have to be geographically sensible economic areas, so I cannot think of anything growing and growing, because it will not. But it will be local people who put forward the bid; the Government will not be saying to any local area, “You have to join”. These are locally led bids for areas that local people think are the right economic areas to do business in and to deliver for them. How big will they be, realistically? They will not be what the noble Baroness suggests, of course, because those would be too big to be really good economic areas, but it is up to local people to do this, as I keep saying.

One of the principles that underpin our devolution agenda is that devolution deals are agreed and implemented over a sensible geography. We want to remove any barriers to neighbouring local authorities joining a combined authority where there is a strong economic, social and environmental rationale for doing so. The new local consent arrangements under Clause 57 mean that the decision would be given to the mayor and council wishing to join the CA. The mayor is democratically accountable to the whole existing CA area, so it is right that they should be the decision-taker for decisions on changes to that whole area.

The arrangements proposed in this amendment could mean that an expansion of a CA area that evidence shows would be likely to improve outcomes for the proposed whole new area could end up being vetoed by just one existing constituent council if the CA’s local constituency requires unanimous agreement from its members on this matter. This has been an issue in the past. This potential impediment to furthering devolution cannot be right; one small authority cannot stop a larger area that wants to grow to be more economically viable.

In his explanatory statement for Amendment 53A, the noble Lord references

“reports that areas may be added to the West Midlands Combined Authority prior to the 2024 Mayoral Election”.

Warwickshire County Council’s plans are part of a local process for the area—county and district councils—and it is up to it to apply to join the WMCA. If Warwickshire decides to pursue this, it will undertake a public consultation, following which it may submit its proposals to the Government. The Government will carefully consider any such proposals, as statute provides. No decisions have been taken by the Government. With these reassurances, I hope that the noble Lord feels able to not move his amendment.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for her response to quite a charged debate. I thought I was quite good on the geography of the West Midlands, but I learned a bit tonight. We are not entirely satisfied with where the Bill is on this issue at the moment. I beg leave to withdraw my amendment, but, as my noble friend Lord Hunt said, I feel sure that we will return to this.

Amendment 25 withdrawn.

Recall Petitions: Voter ID

Baroness Hayman of Ullock Excerpts

Monday 10th July 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My noble friend is right. We have had this debate over and over again, and it is clear that many countries, including Northern Ireland, have voter ID. It works very well, and the people of Northern Ireland are very happy with it. We agreed to do this in our manifesto and will continue to do so. We look forward to it working as well here as it does in many other countries.

[Baroness Hayman of Ullock (Lab)]

My Lords, the noble Lord, Lord Pickles, talked about the initial report from the Electoral Commission. Our concern is that it showed that many thousands of people were turned away, many of whom did not return. We do not know the impact on those who were put off going in the first place, so the Government should not be complacent about that. It concerns me that we have by-elections and elections for recall petitions coming up, but the Government will not act on any of the recommendations and the final report is not coming out until September. Why will the Government not pause the process until they can be more confident about the outcomes?

[Baroness Scott of Bybrook (Con)]

My Lords, the Government are confident about the outcomes. The initial evidence shows that it was a very successful first step. We are pleased to see the Electoral Commission’s report, according to which there were continually high levels of satisfaction with our voting system; 89% of polling station voters said that they were fairly or very satisfied. That is good, and a higher figure than during similar elections in 2019.

Non-Domestic Rating Bill

Baroness Hayman of Ullock Excerpts

Committee stage
Monday 3rd July 2023 Grand Committee

[The Earl of Lytton (CB)]

My Lords, I have two amendments in this group, to which the noble and learned Lord, Lord Etherton, who cannot be with us because he is arguing his case across the way in the Chamber, has added his name. I declare that I am a member of the Rating Surveyors’ Association, which, together with Luke Wilcox, barrister of Landmark Chambers, has been helping me formulate my views on these amendments.

The purpose of the two amendments in my name in this group, Amendments 2 and 6, is to extend the application of improvement relief, so, to some extent, they follow the lead of the noble Lord, Lord Ravensdale. Without discussing it with him, I opted for extending the application to works carried out within a five-year period. The amendments follow up on the comments made at Second Reading.

The expected lifespan of the many types of improvement may extend to decades. If, as one supposes, the relief is intended to incentivise improvements—not just mandatory compliance works but those which add materially to utility, convenience and annual value—it needs to be an altogether bigger quantum; otherwise, as matters stand at the moment, we will be in a situation where, maybe 13 months after the work is carried out, the rateable value will increase by some 50% of the additional annual value of the works. This may not be so much for the purposes of adding value as of preserving value in the face of decline, so this dynamic needs to be whittled down.

We have issues with the definition of “relief” and whether it will count for anything at all in practice, and of “improvement”, of which other noble Lords may seek to define certain aspects more clearly—I agree with that. Unfortunately, the Government’s protestations about the sums they claim to have earmarked for this relief do not disguise the fact that the design of these things is often such that none of it is ever called on in practice. I will leave that bit of cynicism to one side, but if this relief is to mean anything beyond a fig leaf, it has to be large enough in quantum and long enough in duration to be commercially noticeable and relevant. Some types of improvement may take a considerable time to translate into a business benefit.

Although I understand, for instance, not including developers in the benefits of this measure, I maintain that the net effect of excluding any otherwise qualifying works carried out by landlords for the tenant, for which there may be a higher rent payable, is based mainly on groupthink rather than objective balance. That is the reason behind Amendments 2 and 6.

[Baroness Hayman of Ullock (Lab)]

My Lords, I have Amendment 5 in this group. Its purpose is to probe the expiration date for heat network relief. For example, why have the Government come up with 2030 in this respect? As I said at Second Reading, we very much welcome the introduction of heat network relief but, as I asked then, as the exemption of renewable energy plant machinery is permanent, why has a similar approach not been taken to heat networks?

Also, the heat network relief applies only to what are described as “occupied” heat networks, so it would be helpful to have some clarification of the definition of “occupied”. For example, if the networks apply as a mix of properties, some of which are traditionally occupied and others are unoccupied, is that still considered to be an occupied property, or does the whole property have to be occupied?

More broadly, the aims of this amendment are also to do with the fact that we believe that the reform of business rates as a whole should have the underlying principle and aim to encourage green improvements to business properties, if, as the noble Lord, Lord Ravensdale, talked about, the targets are around net zero and emissions. We feel that all the proposals should have as their aim—at their centre—ways of meeting those targets.

I thank the noble Lord, Lord Ravensdale, for his introduction of this group of amendments. His amendments are very sensible, and I hope that the Minister will look at them carefully. I also take this opportunity to thank the Minister for her letter to all Peers following Second Reading, in which she gave quite detailed clarification of a number of issues, which I am sure we will discuss further today. I put on record that that was extremely helpful.

As for the other amendments in the group, clearly, improvement relief has been designed so that no business will face higher business rate bills for 12 months following qualifying improvements. We also heard from the Minister in her letter and at Second Reading that the Government consider 12 months sufficient for the benefits to flow through but, clearly, noble Lords who have spoken previously have reservations about this—in particular the noble Earl, Lord Lytton.

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[Lord Shipley (LD)]

My name appears on three of the amendments in this group. I think that the case made by the noble Lord, Lord Thurlow, is very strong. We have to be certain. I believe a reduction from three years to two years—and, in an ideal world, to one year—would be the right thing to do.

I should state for the Committee stage, however long that lasts, that I am a vice-president of the Local Government Association.

I am convinced that currently revaluations are too infrequent. The Government have accepted that case. We are going to three years, and that is indeed better, but to reduce appeals and to ensure a fairer system requires two years or fewer. Like my noble friend Lady Pinnock, I will be very interested to know why we cannot draw on the comparator of the Netherlands since it does a revaluation every year.

There are clearly advantages to more frequent revaluations. We will have fewer appeals because the valuation would be more accurate. It would be fairer to businesses and reduce complaints about the system. I read very carefully the letter the Minister wrote after Second Reading, but it is not clear to me that there are any administrative barriers to moving from three years to two years.

We support Amendments 8 and 10, which suggest that the Government introduce a change to two-year revaluation or to one-year revaluation by order, as long as the affirmative procedure is used. As I said a moment ago, I think the points made by the noble Lord, Lord Thurlow, matter. I hope the Government will pay particular attention to Amendment 12 because it would enable us to be certain that it would not be a mistake to move to two years. We are sufficiently open to say that we want to go to two years and would like to go to one year, but we are very happy to build in a timescale which enables that to happen securely.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Pinnock, for introducing this group with Amendment 7, which seeks to change the Bill so that lists must be produced every two years instead of three. Today’s discussion has demonstrated that noble Lords think that this needs to be revisited and that perhaps three years is too long.

I am quite interested in Amendment 9 in the name of the noble Earl, Lord Lytton, which would allow SIs to be introduced to change it to one or two years. Bringing in flexibility to adopt a shorter cycle without that kind of prescription is a really interesting idea and approach. In principle, we would support that; my only concern is that the SI procedure has not exactly gone entirely smoothly in recent years. To get our full support to move in that direction, we would need to ensure that SIs are managed better than they have been recently.

The noble Baroness, Lady Pinnock, made some important points about the need for business confidence regarding valuations. That is incredibly important, particularly given the uncertainty resulting from inflation, various costs—of energy, for example—going through the roof, the challenges following the pandemic, the business rate holidays that have moved or not moved, and the differences resulting from where in the country you may be. None of that helps with certainty for businesses, particularly those that have retail in different parts of the country.

Another really good point was made about the fact that a small but perfect group is taking part in these discussions. Here we have noble Lords with real and practical experience and knowledge, which I hope will be helpful as we move through Committee.

The Chartered Institute of Taxation has agreed that moving initially to three-year revaluations would provide a balance between the administrative costs and the need for regular revaluation to reflect the economic conditions of business. But it also said that, given the rapidity of changes in business and shopping practices, the Government should consider a phased approach to achieving more frequent revaluations, and that this should remain under evaluation. Given the different amendments we have today and the discussions that we have had, will the Minister consider taking back to her department the introduction of a phased approach? I know that in the letter to noble Lords following Second Reading, she said that the Government will

“carefully consider the case for even greater frequency of revaluations once the new system changes have bedded in”.

That brings us to the point made by the noble Lord, Lord Thurlow, who suggested that waiting for that three-year cycle to bed in might be very helpful. He made the point that we need to listen to the experts and advisory groups and make sure that we get this right, because anything over two years goes out of date very quickly. The Labour Party position is that we should have more frequent valuations. We have talked about them being annual, but of course this has to be right, and it has to work for business.

Finally, on Amendment 14, tabled by the noble Earl, Lord Lytton, on the abolition of downward caps, it is concerning that the downward caps can prevent savings being passed on to businesses and could mean that they unnecessarily pay more in business rates. It is an important amendment, and I would be interested to hear what reassurances the Minister can give the noble Earl.

[Baroness Scott of Bybrook (Con)]

My Lords, this group of amendments takes us to the heart of the Bill; namely, our commitment to modernise the business rates system through more frequent revaluations. Amendments 7 to 13, from the noble Baroness, Lady Pinnock, the noble Lords, Lord Shipley and Lord Thurlow, the noble Earl, Lord Lytton, and the noble and learned Lord, Lord Etherton, are concerned with the frequency of revaluations. They provide for either the revaluation cycle to move to every two years or for the Government to adopt a two-year cycle by order. The Government fully understand the desire to keep business rates as accurate and responsive as possible. That is why the frequency of revaluations was a key part of our review.

Regular revaluations update rateable values, and so rates bills, to reflect changes in the property market. During the business rates review, we heard from businesses that they overwhelmingly favoured more frequent revaluations. Interestingly, a majority of respondents to the review supported a three-year revaluation cycle. The noble Earl, Lord Lytton, mentioned countries that had annual revaluations, but it is not straightforward or accurate to simply compare our revaluation cycles with places such as the Netherlands. Evidently, a single property tax there covers both residential and commercial properties, so it is a very different system from the one in this country. We also considered annual revaluations, but some stakeholders raised concerns about an annual cycle, such as the increased volatility of bills and potential impacts on valuation accuracy. We therefore concluded that we should move to a three-year cycle of revaluations, and the Bill provides for that, with the next one to take place on 1 April 2026.

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[Lord Shipley (LD)]

My Lords, my name is on Amendments 28, 33 and 34 in this group. I will come to the accreditation of rating advisers in a moment.

There are a range of issues here which relate to the performance of the Valuation Office Agency. I agree entirely with all that the noble Earl, Lord Lytton, has said about the amendment to which his name is attached and with Amendment 15 in the name of the noble Lord, Lord Thurlow, which is about the proposed requirement on the Valuation Office Agency to reveal rental comparables and the evidence used in arriving at a rateable value. A lot of these issues meet the test of reasonable common sense. If I were challenging a business rates bill or valuation, I would want to be certain that it was at the correct level.

The amendments in my name relate to annual reporting and, jointly with the noble Baroness, Lady Hayman of Ullock, to whether the Valuation Office Agency has a problem with its resourcing. We need to be clear whether it has a problem and cannot do things because it does not have the resources. However, the principle that this group of amendments tries to establish is that the Valuation Office Agency should meet the same performance standards that it requires of business rate payers. It should have a duty to provide information requested, in particular comparable evidence on valuations, as I said earlier. That comment relates to Amendments 15 and 16.

It is very important that the burden of the regulatory requirements on business rate payers is re-examined to make sure that all that business rate payers are now being asked to do is valid. It is said that all the proposed increases in workload are required because of the reduction of the valuation time period from five years to three. I am unconvinced by that and I hope that the Minister might be able to explain why that statement applies. Maybe, as I said a moment ago, it relates to resources. However, the Valuation Office Agency should meet the same performance standards that it requires of business rate payers. That is a very important principle.

My Amendment 34 relates to the Secretary of State being required to consult on the benefits and practicability of a system of accreditation for rating advisers. It seeks to explore an avenue for combating the rogue and unprofessional practices of some rating advisers. It is a simple issue. The new duty to notify will give rise to demand for professional help among business rate payers and, therefore, a serious risk of there being a rise in unqualified advisers offering services, so I conclude that there should be a licensing or accreditation system. At the very least, the Government should consult on that.

The context is simple: there is to be more work for business rate payers, the system is more complex, more will seek professional help and, when they do so, they will expect expert advice. If they do not get expert advice and mistakes are made which perhaps cost the business rate payer a substantial sum as a consequence, whose fault will that be? Of course, the immediate fault will not lie with the Government or the Valuation Office Agency, but behind that failure will be the fact that the Government could have done something to ensure that those who are giving advice are competent to do so.

This is simply a proposal that the Government set up a consultation for a system of accreditation. I hope that the Minister will take it seriously; it is a big issue. The changes in the Bill are welcome in so many ways but, as the noble Earl, Lord Lytton, said a moment ago, there is a danger of unintended consequences, which will cause some to feel that they have not been properly attended to. Setting up a consultation on the issue of accreditation of advisers seems an appropriate measure that the Government could take.

[Baroness Hayman of Ullock (Lab)]

My Lords, as we have just heard, I have Amendment 28 in this group. I thank the noble Lord, Lord Shipley, for his support for my amendment. We tabled this because we are concerned that the VOA may not be sufficiently resourced, particularly as the Bill gives the agency additional responsibilities. The noble Lord, Lord Shipley, has clearly expressed many of the concerns behind the amendment.

I looked at some recent data about the number of staff employed by the agency. The latest figures that I could find showed that it has a full-time equivalent of 3,698 staff, which is not huge, to be honest, particularly as a large number of new responsibilities is being brought its way. The global property consultancy, Colliers International, has described the Government’s plan to reduce the number of VOA offices from 56 to 26 as “a shambles”, and said that it will be a

“nightmare for businesses wanting to appeal their business rates”.

That is another reason why I was concerned enough to table this amendment.

We also know that there have been problems with the VOA managing the number of appeals and the time taken for resolution. I very much support what the noble Lord, Lord Thurlow, said in his excellent introduction to this debate, about the importance of transparency. He also talked about the number of challenges—30%—resulting in reduction. Clearly, that is too high and needs to be addressed—and the VOA needs sufficient resources to be able to do so.

We also know that, often, the number of challenges and the time taken for resolution relate to the number of rogue agents, many of which want to make a fast buck out of this. That is why we support Amendment 34 in the name of the noble Lord, Lord Shipley, which looks to address this. Again, we had discussions about it at Second Reading. We support his amendment and that of the noble Baroness, Lady Pinnock, in this group. In the letter that the Minister sent to noble Lords after Second Reading, she acknowledged that rogue agents need to be looked at and that this would be part of a government consultation. I hope that the Government will take this seriously enough to consider action on this following the consultation, because it seems genuinely to be a problem.

We very much support what Amendments 15 and 17, in the name of the noble Lord, Lord Thurlow, are trying to do to increase transparency in the revaluation process. We hope that that transparency would also reduce the number of appeals, as the noble Lord so eloquently said. Amendment 16, tabled by the noble Earl, Lord Lytton, would also increase transparency, and we would be happy to support it. Clearly, increasing transparency is important, but we have to be careful that amendments we put down on transparency do not have the unintended consequence of adding to the valuation office’s workload without it having sufficient resources—this comes back full circle to what I said at the beginning.

There is also the risk of a major bottleneck in the system, through the new online portal. It would be good to have reassurances from the Minister about how that will be resourced and managed. It is human nature that a large proportion of ratepayers will put in requests for their rental evidence soon after the 1 April date, when the new rating system is published. It would be helpful if the Minister could give assurances that the VOA will be able to respond in time to allow ratepayers and their agents to construct and submit challenges by 30 September—the six-month deadline—because that six-month window for a challenge is a fundamental change to the rating system. We need greater clarity and certainty about exactly how that window will operate, particularly in relation to new tenants and the changes in the list that occur during and after the six-month window. Where is that flexibility?

The Bill states that a ratepayer must provide “annual confirmation” that they have, first, provided “all notifiable information required” or, secondly, that they are “not required to provide” any such notifiable information. Is this confirmation likely to be digital, to fit in with the online system? Will accessible formats be reduced, and will any mitigating circumstances be considered, if a person is unable to complete that confirmation?

As the noble Earl, Lord Lytton, described it, his Amendments 18 to 20 remove the requirements for the annual return. He talked about duplication and unnecessary returns, and it would be helpful if the Minister could provide clarification on that, because a number of changes to how this is done are coming in, and it is important that it works smoothly from the start.

[Baroness Scott of Bybrook (Con)]

My Lords, group 3 concerns information sharing between the Valuation Office Agency and ratepayers, the performance and capacity of the VOA, and the behaviour of some of our rating agents. Central to this part of the Bill is our commitment to move to more frequent revaluations, delivered by Clause 5. As we have discussed, sustainably delivering this important goal is contingent on increasing the timeliness and quality of the information received by the VOA.

To ensure that the VOA has that timely and complete flow of information, Clause 13 introduces a duty on ratepayers to provide notifiable information to the VOA and to confirm each year that they have met their obligations under that duty. In return, Clause 10 provides the means for ratepayers to access an analysis of evidence used to set the rateable value for their property, which should reduce the need for ratepayers to make a challenge. Ratepayers will be able to access guidance from the VOA, provide information on their property and request evidence on their own valuations, all through an online service. This will be the same online portal through which ratepayers will also be able to provide their taxpayer reference number to meet the other duty introduced by Clause 13.

The noble Earl, Lord Lytton, asked about information if you have more than one property. The VOA will seek to enable ratepayers with multiple properties to provide information about their properties at the same time every 30 days, to limit their administrative burden. We have listened to requests from stakeholders for this functionality, and we recognise that there is also a benefit for the VOA from receiving information in this way. We will work with businesses, agents and software suppliers to rebuild a robust and effective system for ratepayers. The deadline for notification of the underlying changes will remain at the now-increased 60 days, and the same deadline will apply to all, regardless of the means of notification.

I turn to Amendments 18 to 20. As I have set out, Clause 13 includes a requirement on the ratepayers to confirm once a year that they have provided the information required of them—this will be digitally, to respond to the noble Baroness, Lady Hayman—under the VOA duty. Amendments 18, 19 and 20 from the noble Earl, Lord Lytton, and the noble and learned Lord, Lord Etherton, would remove that requirement. I shall explain why this part of the duty is necessary.

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[Baroness Pinnock (LD)]

My Lords, the noble Earl, Lord Lytton, has raised an important group of issues regarding the penalties that could be imposed on ratepayers who do not provide accurate, timely information. I hope that the Minister will be able to respond to that and explain how ratepayers seem to have more and more imposed on them. They must provide the information annually to the VOA—in the last group we debated the VOA’s transparency in relation to that—and the noble Earl has just raised the quite significant penalties imposed if the information is not accurate, even if, as he pointed out, there is a genuine error. It seems that, in the previous group and this one, we do not have the right balance of responsibilities between the VOA requiring information, what business rate payers are required to provide and where the final duty lies.

The VOA is serving two masters: the Treasury on one hand and business rate payers on the other. It seems that the VOA is responding to its Treasury master and is not giving sufficient cognisance to the customers—the business rate payers. The noble Earl raised some important points regarding that. We must get this balance right. The VOA needs to be more transparent and responsive to business rate payers. It also needs to be accountable to them—and the reverse is also true, as the noble Earl said. The VOA demands penalties if the ratepayer gets the information wrong but—hang on—the VOA makes errors all the time. Where is the accountability and compensation to business rate payers for those errors? The noble Earl raised that issue and I hope that the Minister will be able to get the balance right when she responds.

[Baroness Hayman of Ullock (Lab)]

I thank the noble Earl, Lord Lytton, for bringing the amendments on penalties forward because a number of questions around compliance and the penalties regime have been drawn to our attention. One is how it aligns with the wider UK tax regime generally. Another is that a new criminal offence is being created here, but is that actually necessary? Is this not covered by existing legislation and existing criminal charges, for example? I am more broadly probing why we need a new offence here.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I will be very brief. The noble Earl, Lord Lytton, has laid out his concerns very clearly and in great detail. At the least, we need clarification. We have talked about the problems around licensing conditions; the hospitality sector in particular is very concerned about the implications of being stuck with a valuation for three years that, bluntly, may not be correct. It would be very helpful to hear what the Minister has to say and for her to give reassurances to the licensing sector that its circumstances will be taken into account.

[Baroness Scott of Bybrook (Con)]

My Lords, I am grateful to the noble Earl, Lord Lytton, and the noble and learned Lord, Lord Etherton, for their amendment. I understand the concerns around this clause; I will take the opportunity to explain why we consider this measure to be necessary and to set out the limits of its application.

As we have heard throughout the passage of the Bill, more frequent revaluations and the measures we are introducing to support them are central to the reform of the business rates system. It is through those revaluations that the rating system is able to track and reflect changing economic circumstances. In property valuation terms, rateable values are updated at revaluations to reflect changes in economic factors, market conditions and changes in the general level of rents.

Of course, that does not mean that rateable values never change between revaluations. It would hardly be fair if, for example, a ratepayer demolished part of their property but this was not reflected until the next revaluation, or if a new property were built but escaped rates until the next revaluation. Therefore, some changes are reflected in rateable values as and when they happen. Examples include changes to the physical state of the property, the mode or category of occupation of the property or matters affecting the physical state of the locality. These matters, reflected as and when they occur, are called material changes of circumstances—MCCs.

The MCC system has been operating in this way for many years, but, during the coronavirus pandemic, we found that it was not working as intended. Large numbers of challenges were made, seeking reductions between revaluations for the effects of the pandemic, which by their nature were part of the general market conditions. Such general market matters should be considered at general revaluations.

Therefore, the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 clarified the law to ensure that coronavirus and the Government’s response to it were not an appropriate use of MCC provisions. Specifically, that Act ensured that anything done to comply with legislation, advice or guidance given by a public authority and attributable to coronavirus should not be an MCC, subject to some exclusions. The principle in that Act was approved by both Houses, and it received Royal Assent on 15 December 2021.

Clause 14 of the Bill merely takes that principle, clarified and accepted by this House in the 2021 Act in relation to coronavirus, and applies it more generally to all legislation, guidance and advice from public bodies. Changes in such matters are part of the economic factors and market conditions for a property and should be reflected at a general revaluation. This clause will protect the integrity of the rating system and ensure that more frequent revaluations can proceed smoothly. It will protect the system not just for central government but for local government, which relies on the revenue from business rates. The Local Government Association supports this clause and agrees that these matters should be reflected at general revaluations. But this does not mean that these matters are not reflected in rateable values; it just means that they are reflected only at the set date of each revaluation, along with all other economic and general market factors present at that date.

Furthermore, we have limited the scope of Clause 14 to three aspects of the MCC system to ensure that it operates fairly. This is to ensure that physical changes to the property or the state of the locality are still reflected. Therefore, Clause 14 will bite on only three types of MCCs. First, it will catch matters affecting the physical enjoyment of the property but not the physical state. This might include changes in how the property can be used following new legislation or guidance. Secondly, it will catch matters that are physically manifest in the locality but not matters affecting the physical state of the locality. This might include changes to traffic flows and bus or transport services. Thirdly, it will catch the use or occupation of other premises in the locality, which might include the change in use of a nearby property where, for example, the original use has been prohibited by new legislation.

Clause 14 will ensure that matters such as physical changes to a property or to the state of the locality continue to be immediately reflected in valuations, even if they are a result of new legislation or guidance. Clause 14 will also not bite on whether the property is non-domestic or domestic or whether it is exempt. Overall, Clause 14 will preserve a long-established principle by ensuring that matters that go more to the market conditions and general level of rents of a property belong in the general revaluation process. Of course, with more frequent revaluations, these factors will still be updated more often than ever before.

The clause will provide important stability and certainty to the rating list and, therefore, to the vital revenue for local government that flows from the list. Therefore, it would not be prudent to delay the introduction of the clause, as this amendment seeks. I know that the noble Earl will be disappointed that we are unable to agree to this, but I hope that I have set out the basis for taking this measure and also given him some assurances regarding its scope. I will look at Hansard tomorrow and will write to noble Lords with further explanations if I feel that they are required.

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Moved by

[Baroness Hayman of Ullock]

29: After Clause 15, insert the following new Clause—
“Threshold for small business rate relief adjustment: impact assessmentWithin 90 days of this Act receiving Royal Assent, a Minister of the Crown must lay before Parliament an assessment of the impact of reducing the threshold for small business rate relief on the future of the high streets.”Member’s explanatory statement
This is intended to probe the possibility of reducing the threshold for small business rate relief.

[Baroness Hayman of Ullock (Lab)]

My Lords, Amendment 29 was tabled just to probe the possibility of reducing the threshold for small business rate relief, particularly in consideration of our high streets. We know that business rates remain one of the largest fixed costs for retailers and that they fundamentally impact business planning and investment decisions; for example, the convenience sector’s business rates liabilities are over £274 million, despite the small business rate relief. We also know that retailers are facing a particularly difficult time at the moment: we have increased commodity prices, skyrocketing energy bills and structural changes to the labour market—there is an awful lot going on and a lot of instability.

We are concerned that the current revaluation of business rates, which was implemented in April this year, will hit smaller high street stores in particular. They struggled during the pandemic and afterwards, and, combining that with a winter ahead with higher energy bills, we have particular concerns. We have called for short-term support through an increase in the threshold for the small business rate relief. We suggested that the current threshold of £15,000 be increased to £20,000 in order to give SMEs a discount on their business rate bill for 2023-24.

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Having only recently conducted a comprehensive review of the rates system, and having set out our plans for monitoring and reviewing the measures in the Bill and the protections for local government in our administration of the system, I trust that noble Lords will agree that these amendments are unnecessary.

[Baroness Hayman of Ullock (Lab)]

I thank noble Lords for the debate we have had on this, and I thank the Minister for her thorough response to the debate. I thank her particularly for her assurances regarding the impact of the revaluation on local authorities. It is important that that is taken into account. There are still outstanding issues in this area, particularly around the impact on the hospitality industry and other specific groups that will be affected and how we manage online versus high street and get an equitable position. I should have mentioned in my opening speech that we support the amendment tabled by the noble Lord, Lord Thurlow, and I thank him for his introduction to it. I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Social Housing (Regulation) Bill [HL]

Baroness Hayman of Ullock Excerpts

Consideration of Commons amendments
Tuesday 27th June 2023 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, amazingly, it has been eight months since this House last discussed the Bill. At that time, I welcomed it and many of the details it provided to improve the regulation of social housing. However, across the House, noble Lords challenged the Government to think again on some of the detail of the Bill. The noble Lord, Lord Best, and the noble Baroness, Lady Hayman, have outlined some of the ways in which the Bill was challenged and subsequently improved.

I am pleased to say that some of the government amendments in the Commons have indeed built on the amendments made on Report in this House. I particularly support Commons Amendment 13, which sets new professional standards for senior social housing managers, as I do the power for the ombudsman to provide best practice guidance. Those are two great improvements made to the Bill since it first started in this House.

The Commons also introduced into the Bill “Awaab’s law” in memory of the tragic death of two-year-old Awaab Ishak, which was caused by appallingly damp and mouldy conditions in the flat where he and his family lived. The response of the social housing landlord was shockingly neglectful—and, as it turned out, fatally neglectful for poor young Awaab. I congratulate the Government on introducing that new clause to address those responsibilities and to ensure that social landlords properly address what is described in the amendment as “prescribed hazards”. Let us hope that this is sufficient to ensure that no family lives in such dreadful conditions again—albeit it applies currently to social housing only.

Finally, although I am pleased that on Report the Government accepted my amendment to include energy efficiency as a core responsibility of the regulator, I am disappointed that they have not been able to be as positive about the amendment in the name of the noble Baroness, Lady Hayman, agreed by this House, which contained a comprehensive approach to energy efficiency that my simple amendment failed to do. We have a challenge as a country, and the Government have a responsibility to make changes so that homes are warmer and less expensive to heat. There was an opportunity to do so; unfortunately, the Government failed to accept it.

However, I am pleased that the Government and the Minister have agreed to consult—although, as always, the caveat is the question of what that will lead to, as the noble Baroness, Lady Hayman, alluded to. I am sure that the noble Baroness and many of us in this House will scrutinise closely the outcome of such a consultation. This is an important matter. We need to get it right. People should not be living in cold homes because they cannot afford to heat them. If the Government have the power to make a change, we will press them to do so.

I want to end on a positive note. We on these Benches support the Bill and trust that social housing tenants will see the benefits that it should bring.

[Baroness Hayman of Ullock (Lab)]

My Lords, this is a really important Bill. I am pleased to see it reach this stage; we have supported it all the way through. It has been a pleasure to work on a Bill that I think is the kind of Bill we ought to be doing. It is short, it is focused and it has a Minister who listens. That has been extremely good to work with. I am really pleased to see the government amendments that have been put forward, in particular those around professionalisation. I also pay tribute to the noble Baroness, Lady Sanderson; her work during the passage of the Bill was exceptional and is, I am sure, one of the main reasons why we have these amendments before us today. On Awaab’s law, I join the Minister and other noble Lords in paying tribute to his family.

I am pleased that the Government have listened to the concerns raised by the arm’s-length management organisations and tenant management organisations, as well as the National Housing Federation, in bringing forward the amendments that dealt with the concerns there.

The noble Lord, Lord Best, welcomed the promised amendment on inspections that was so important to Grenfell United. We are absolutely delighted that the Minister has brought forward those amendments today. I want to thank Grenfell United, Shelter and the Ishak family for their work and support during the passage of this Bill; it has helped us to keep the important issues at the centre and as the focus of what we need to achieve.

I thank the noble Baroness, Lady Hayman, for pushing the energy efficiency amendments, which are really important. It is good that we did not lose sight of them during the Bill’s passage and that we have made some progress. I also thank the noble Baroness, Lady Pinnock, for bringing forward her amendment on that.

I thank the Minister and her officials for their time and their constructive approach to working with us, the Opposition, and other noble Lords during the Bill’s progress through the House. It has enabled us to make what was a good Bill a much better Bill—one that is more fit for purpose.

Finally, I thank my noble friend Lady Wilcox for her invaluable help and support. I am sure that we are now both looking to see the Bill go on to the statute book, so that we can raise our eyes up and look forward to the Renters (Reform) Bill.

[Baroness Scott of Bybrook (Con)]

My Lords, I am grateful to all noble Lords who have contributed and for the wide-reaching support for this important Bill. In particular, I thank my honourable friend the Member for Bishop Auckland for steering the Bill so ably through the other place. I also thank the department’s Bill team, all the policy and legal officials, and my private office team, who have worked hard over the past year to deliver this legislation through both Houses. I especially thank the House authorities, parliamentary staff, clerks and doorkeepers, and all noble Lords who have contributed to the evolution of this Bill.

Holocaust Memorial

Baroness Hayman of Ullock Excerpts

Thursday 22nd June 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I agree with my noble friend. I look forward to the Second Reading and the Bill beginning to go through Parliament and, subsequently, to the building of this important monument.

[Baroness Hayman of Ullock (Lab)]

These Benches share the sentiments and the tribute made by the Minister to Sir Ben. If it is built in Victoria Tower Gardens, the memorial will clearly bring many new visitors to Westminster and to Parliament, which I think is a good thing. However, local residents will want to have a park that they can still be proud of and use for their own recreation. How will the Government ensure that the park is still available for local people to enjoy?

[Baroness Scott of Bybrook (Con)]

The design is sensitive to the heritage and the existing uses of Victoria Tower Gardens; I think it has been misunderstood. The design uses approximately 7.5% of the area of Victoria Tower Gardens, and this project will allow enhancements to be made to the remaining 92.5% of the park. In my opinion, that will help visitors to enjoy the park better, even if they are not attending the memorial.

Families with Children: Accommodation

Baroness Hayman of Ullock Excerpts

Monday 19th June 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My Lords, that is exactly why we have suggested that more of the £11.8 billion-worth of affordable housing funding should go into the building of social housing. As can be seen from the levelling-up Bill going through this House at the moment, more emphasis is being put on the social housing sector in building.

[Baroness Hayman of Ullock (Lab)]

My Lords, a recent report by academics at the University of Kent and the University of Southampton called Homelessness in the Countryside: A Hidden Crisis shows how rural homelessness is often out of sight, out of mind, hidden and overlooked by both national and local policy. This results in a lack of vital services and support for those in need. What specific action are the Government taking to tackle rural homelessness?

[Baroness Scott of Bybrook (Con)]

The noble Baroness brings up a really interesting point, because we often talk much more about urban and city-based homelessness. From my own experience, I know a lot about rural homelessness. It is hidden; the noble Baroness is absolutely right. The way to deal with this is to make sure that the responsibility, as it is in legislation, and the funding go to local authorities, which know their issues much better than anybody else.

Non-Domestic Rating Bill

Baroness Hayman of Ullock Excerpts

2nd reading
Monday 19th June 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for her thorough introduction and all noble Lords for their participation. Having been doing the levelling-up Bill, I have to say that it is nice have a Bill that is very focused. We broadly support the measures in the Bill. Clearly, business rates need modernising, as we heard, and some of the measures in the Bill will provide much-needed support for struggling businesses. But, like others who spoke in the debate, we believe that it is still lacking in areas where small businesses need support, so it is a bit of a missed opportunity as well.

Small businesses are a critical part of our economy and communities, and, as we have heard, they are the heart of our high street and of local employment. On these Benches, we believe that it is necessary to cut business rates for small businesses by raising the threshold for small business rate relief. We would pay for this by raising the digital services tax paid by online giants such as Amazon.

The noble Lord, Lord Shipley, and others mentioned the increase in online shopping, partly brought about by what happened during Covid, when many more people began to shop online. But, as the noble Lord, Lord Thurlow, said, nothing seems to have been done about this. So can the Minister provide further information about any progress at all, if any, that the Government have made on implementing fair taxes on the major online businesses?

The Savills analysis of recent business rates revaluation noted considerable variations in outcomes between different billing authority areas. It notes that retail units in some city centres will see an overall reduction in rateable value, but those in some small towns will see considerable increases—the noble Baroness, Lady Pinnock, referred to this. So, if the Government do not think that an impact assessment on the revaluation for smaller businesses, high streets and towns is needed, how do the Government see this benefiting levelling up if they do not have this information?

The noble Baroness, Lady Thornhill, and the noble and learned Lord, Lord Etherton, talked about the serious challenges facing our high streets and smaller businesses. I particularly mention concerns that were drawn to my attention by the British Beer and Pub Association, which has concerns about certain aspects of the Bill, particularly around the proposals for improvement relief. Of course, it is important to have the improvement relief proposals in here—it is a good step forward—but the British Beer and Pub Association said that improvements made by landlords in a period between tenants, who are the ratepayers, or with any change in tenant during the relief period, will not be eligible for relief. The main concern here is that improvements made by landlords on behalf of tenants who then move on while the property remains owned by the landlord would not be eligible.

In practice, this means that pubs that are not directly owned and managed by the ratepayer—namely, those in tied or leased arrangements, which is apparently around 30% of UK pubs—become a much less attractive proposition for investment, as improvement relief can be guaranteed only on directly managed pubs. A change to the Bill to this end would mean that leased and tenanted pubs could then be on an equal footing with directly managed pubs, in terms of the likelihood of receiving investment. Will the Minister take note of these concerns and look, ahead of Committee, to see whether the Bill could be improved in this respect?

Retailers have expressed concerns that the Bill will significantly increase the overall administrative burden through the new duty to notify procedures—this was a central concern in the debate. It would be helpful if the Minister could confirm whether every ratepayer will now have to fill in a new return for the Valuation Office Agency every year and every time there is a change to the property. Does she think that the new duty to notify will put increased burdens on smaller businesses, potentially forcing them into the hands of rogue rating advisers, as we heard from other noble Lords, particularly the noble Lord, Lord Thurlow?

The noble and learned Lord, Lord Etherton, mentioned his concerns about the extra 750,000-odd business-property occupiers who do not currently pay rates. They would have to return forms to the VOA, and they will have to cope with the huge administrative challenges of this. As well as businesses, this will have an impact on local authorities. So I would be interested to hear the Minister’s response to the noble and learned Lord’s concerns. Will local authorities have extra resources to deal with this administrative burden?

Noble Lords mentioned how promptly the VOA will act, as no similar obligations have been placed on it to produce its assessments quickly, and there have been no further measures to increase transparency—the noble Lord, Lord Thurlow, in particular talked about the importance of transparency. I am not aware that anything about speeding up the appeals system has been stated, so perhaps the Minister could provide further information about this.

We heard about the review of valuations changing from five-yearly to three-yearly intervals, and we are pleased that this has been reduced. But, bearing in mind that the VOA already has a significant backlog of appeals, are there sufficient resources within the VOA to deal with these proposed changes? What will happen to disparities in valuations between the VOA and the property owner or agent? Of course, in the audit world, this has caused major problems between local authorities and their auditors.

Currently, the new rateable values set at a revaluation are based on the situation two years previously, which, again, noble Lords have raised concerns about. Ministers have said that reducing the length of time between the AVD and a revaluation taking place remains

“an aspiration once the new 3-yearly cycle and supporting changes are fully bedded in”.

Can the Minister update us on what progress the department is making on this?

The noble Earl, Lord Lytton, and the noble Baroness, Lady Thornhill, talked about incentives for business to invest. Do the Government intend to do anything about tariffs and top-ups? So many areas have little incentive to improve their business base because the tariffs can be so fierce.

The Bill is an opportunity to give businesses a clearer incentive to improve energy efficiency, freeing up funds for business investments to enhance competitiveness while supporting net zero. We very much support the Government’s and the Bill’s proposals in this area. Strengthening the provisions on business rates in relation to energy-efficiency improvements is certainly an important step.

The Government have already made welcome steps to address these issues by exempting renewable energy generation and storage from rateable value, through regulations introduced last year. But these regulations did not cover energy-efficiency works, and the Government have made much more limited steps on energy efficiency more broadly, proposing just one year of business rate relief against the increase in rateable value in the Bill.

The introduction of heat network relief, mentioned by noble Lords and in Clause 1, is welcome, but it would be helpful to understand why it has been proposed to expire in 2035. The exemption of renewable energy plant and machinery is permanent, so why is there a difference here? Could we not take a similar approach?

Finally, the charity sector has raised concerns that its exemptions will be affected. Can the Minister provide reassurance that this will not be the case? Conversely, will the Government then use the Bill to tackle the fraudulent exemptions claimed when non-charity businesses let a charity occupy a small part of their premises, just so that they can then claim that charity exemption?

In conclusion, we believe that the Bill should go further, as I think do all noble Lords who took part in this debate. I am pleased to hear the Minister say in her introduction that there will be longer-term reforms, such as a commitment to explore further reforms, including the potential for annual revaluations in future. That is something that the Labour Party has been calling for. We welcome and support the Government’s ambitions in this respect but we need something to happen as well. These should not just be commitments to explore; we need to see what the outcomes will be and to learn when we will see them.

I apologise for the large number of questions I asked. I will be very happy for the Minister to write to me ahead of Committee on any that she cannot respond to today. We have quite a lot of issues to explore further.