Levelling-up and Regeneration Bill

Baroness Pinnock Excerpts

Report stage
Monday 4th September 2023 Lords Chamber

[Baroness Hoey (Non-Afl)]

My Lords, I also strongly support what the noble Baroness said on this. It is something that I have been very concerned about for a long time and you cannot divorce it from the way that post offices have been run down by our Government. The reality is that post offices cannot now do many of the things that they used to do. It is a drip-drip thing that is gradually making it very difficult particularly for the elderly and those who have no access to a bank account or are not near a bank.

Whatever the Government might think of GB News, I do not understand why they will not look more at its huge petition to say that we do not want to be a cashless society. This is really important. The noble Baroness is starting the fightback, which I hope the Government will listen to. I hope that she puts this to a vote, because people talk a lot about it but, when it comes to the crunch, noble Lords need to show that they mean it; otherwise, it is useless us being here.

[Baroness Pinnock (LD)]

My Lords, it is as if we were never away. I remind the House of my relevant interests as a councillor on Kirklees Council and a vice-president of the Local Government Association.

The noble Baroness, Lady Hayman of Ullock, made a very strong case in support of her Amendment 164, to which I have added my name. This amendment is so important because this is, after all, a levelling-up Bill. If there is no access to financial services in the very places that are the focus of the Government’s mission statement for levelling up, we are doing them a disservice and not, in fact, helping to level up. So I hope the Minister will take heed of the noble Baroness’s arguments.

The House of Commons Library produced a very informative briefing on this very issue last year. One of its statistics was that overall use of cash payments fell from 45% of all transactions in 2015 to 17% in 2021. However, since the cost of living crisis, there has been anecdotal but substantial evidence that use of cash has increased as families find it easier to control their spending if they make cash payments.

The noble Baroness, Lady Hayman, has argued on behalf of those without bank accounts; there are a large number of such people. How will they manage if they cannot access cash? Perhaps the Minister will be able to tell us. As the noble Baroness, Lady Hayman, said, it is also more difficult for some older people and those with disabilities, particularly learning disabilities, to manage bank accounts, whereas they can live more independently with cash.

As the noble Baroness, Lady Hayman, said, all these changes to a more cashless society depend on a good mobile signal or access to broadband. Let us remember that these are simply not available in many parts of the country. The noble Baroness, Lady McIntosh, knows how difficult it is to access a mobile signal, let alone the internet, if you live in the Yorkshire Dales. Moving without thought to a lack of in-person banking access will seriously harm people in rural communities and those folk I mentioned.

So far, we have not thought much about local retailers in small towns and villages, which often carry out their transactions by cash. The question for those retailers, which some of them have raised with me, is where they deposit their cash if there is no bank available. If they have a substantial amount of cash, as some of them will, travelling with it and depositing it is a risk in itself.

The number of physical banks has fallen by 34% between 2012 and 2021—so says the House of Commons Library briefing. That is a substantial number. The Government anticipate that the loss of banks can, on the one hand, be resolved by people using post offices, but the number of post offices too is in sharp decline. Huddersfield is a very large town of more than 100,000 people. The post office in its centre has now moved into a branch of another shop, so it is not even a post office on its own. You have to walk through the shop to get to the post office at the back. That is hardly a presence in our towns and communities that encourages people to believe they have access to cash and banking facilities.

Finally, during the recess somebody told me about a particular banking problem they had. The bank had made an error in a transaction and wrongly attributed it as a charge on their account instead of as a payment. Resolving this problem took a couple of weeks. The person in question could access their internet account and tried resolving it that way. They failed. They tried to phone the bank: “Press 1, press 2, press 3”; “Hold on: I can’t do it”, they were told, “but ring in the morning, when somebody will know what to do”. In the morning, they were told, “Go to your local branch”, at which point the person in question said, “It closed last week. Where do you expect me to go?” In the end, they had to travel 20 miles to the nearest bank in a large city to try to see somebody to resolve the issue. It was then resolved, because you are more able to get such things sorted in person.

That will not be the only example; if I have heard of that, there will be numerous examples of that sort of situation. If that happened to an older person without access to the internet or the ability to get by public transport to a branch 10 or so miles away, they would have been at a huge disadvantage and lost that money, because there would be no way to resolve the issue. That is why banking and financial services need to have a physical presence in our communities. We do not expect every bank to have a branch everywhere, but we do expect the Government to agree to the amendment from the noble Baroness, Lady Hayman, to try to resolve this issue so that we can help to level up some of our communities and some of our folk. If the noble Baroness intends to move the amendment to a vote, we will certainly support it.

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[Lord Deben (Con)]

My Lords, I remind the House of my interest as an honorary fellow of the RIBA. I support this amendment because I think there is a huge need for people to know where they are. It is very simple but there is so much of this in government—and probably elsewhere—that people find it very hard to understand and react properly because they do not know where they are. In the planning system, this is particularly notable.

As my noble friend Lord Lansley made his speech, it all sounded so obvious and natural. It is exactly what we should do. Therefore, we know what the Government’s answer will be: “We will do that, so we do not need to put it into the Bill”. I am afraid I am becoming less and less willing to accept the promises of Ministers based on simply saying they will do something. We recently had a very good example of this. I thought we understood that we were not going to make deleterious environmental decisions in any legislation at all because we could trust Ministers not to do that. It is very debatable that that is now being maintained.

I say to the Minister that if it is something we do anyway, there is no harm in putting it in the Bill. If the Government object to something because they do not do it, then they should explain that they do not do it. However, if the argument is that the Government already do it and therefore do not need to put it in the Bill, I do not think the House should accept it any more. If the Government feel unhappy with that, I suggest that they remember they are not necessarily going to be the Government permanently. Therefore, when they are thinking deleteriously of those who might replace them, surely they would want to ensure that were they to be replaced, the new Government would have to accept the same rules. I do not think they need to feel unhappy; rather, they should say they are ensuring that the system works for everybody, whoever may be running it. It is also a good thing for a Government to recognise that people really want to know where they are, and this is one of the areas where we do not.

[Baroness Pinnock (LD)]

My Lords, the noble Lord, Lord Lansley, has raised a very important point about the effectiveness of a plan-led system if local plans are not up to date. The noble Lord, Lord Deben, has enhanced that argument by saying that people need to know where they are. If this is only in guidance, but we require there to be local plans—as we do in a plan-led system—why is it not incorporated in statute? I hope the Minister will answer this question.

The noble Lord, Lord Lansley, has raised a fundamental issue. Local plans are at the very heart of a plan-led system. As well as setting out local planning policies, the local plan allocates land for new housing developments; it allocates land for business development, thereby allocating land for jobs; and it allocates land to be protected, such as the green-belt land allocation.

If local authorities are not preparing, or do not have, an up-to-date local plan, then land is not being allocated for development. We will later have debates about housing targets, but one of my concerns about housing targets is that, if local authorities do not have an up to date local plan, land is not being allocated or set aside for housing development. If land is not being set aside for housing development, it is very likely that new houses are not going to be built.

The government website helpfully has an alphabetical list of authorities and the status of their local plans—although it is unhelpful in being able to look at them more carefully. The vast majority do not have an up-to-date local plan. In fact, one or two on the list do not appear to have updated their local plan for several years. What that tells me is that, currently, the expectation is that local authorities will develop a local plan and have it agreed, with a full review after five years. Helpfully, my own authority is not one of those that does not have an up-to-date plan, and it is currently beginning a review a year ahead of expectation.

If land is not allocated for housing, how on earth do we expect housebuilding to take place? I hope the Minister will be able to help me with this, because some time ago in a previous debate on this, I thought I recalled the Minister stating that a five-year supply of land will no longer be a requirement and will be waived by the Government. As I understand it, at the moment that is the only stick to encourage—or force, even—local authorities to allocate land for housing in a local plan. Currently, although it may be waived—and I am waiting for the Minister to respond to that—as I understand it, if a local authority does not have a sufficient supply of land for a five-year allocation according to government housing targets, then developers can choose where to develop. It is open season for housebuilding. If that one stick is being waived—and I hope I have remembered that correctly—then I would like to hear from the Minister on how they will encourage local authorities to have up-to-date plans, because without them, I do not see how we will meet housebuilding targets.

The issues that the noble Lord, Lord Lansley, raised, are fundamental. When he replies, will he say whether he wishes to test the opinion of the House on this? Without an up-to-date plan, all the Government’s housing targets approach—which my party does not necessarily agree with—comes to nothing. Only the authorities that do the right thing, having difficult discussions with communities about allocating land for housing and other development, will supply the houses that need to be built. Everyone across parties accepts the importance of building more houses; how we get there is the issue. However, I would love to hear from the Minister how that will be enforced without an up-to-date local plan. If the noble Lord, Lord Lansley, in responding wishes to push this further, we will support him.

[Baroness Taylor of Stevenage (Lab)]

My Lords, it is good to be back in your Lordships’ House. I remind the House of my interests as a serving councillor on both a district and a county council, and as a vice-president of the District Councils’ Network. I say for the record that, in spite of the considerable difficulties in doing so, not least the local MP calling our local plan in and it sitting on the Secretary of State’s desk for 451 days, my local authority has an up-to-date local plan.

During my several recent visits to Mid Bedfordshire—for reasons of which many Members of this House will be aware—it has become clear that the public are becoming increasingly aware of the key role that the planning system plays in determining the future of their area. This is very healthy, and I hope it will continue. That makes it even more important that local plans are up to date and meeting the current challenges of local areas and their communities. The importance and precedence of local plans within the new planning system envisaged in the Bill will be even more diminished where local authorities do not take responsibility for updating their local plans seriously. The figures we heard in Committee, that only 39% of local authorities have an up-to-date plan in place, and that there are around 60 local planning authorities whose plans are paused or stalled, already expose those areas to developers who want to take advantage of the absence of clear local direction. They are destined under the new regime in the Bill to see the views of local people overridden by NDMPs and other government direction. Our fear is that this will just reduce the incentive for local government to keep its plans up to date.

We have also seen that, in order to keep pace with rapid changes to local economies, it is vital that local authorities work with their business community to ensure that their local development plan is up to date and fit for purpose for that reason, as well as due to all the issues around land use.

The CPRE’s review of the impact of local plans led to its conclusion that

“the government needs to give councils more support and consider how to redefine the test for plans being ‘up-to-date’ in order to reinvigorate democratically accountable locally-led planning”.

For fear of misinterpretation, this does not mean the kind of centralisation of plans we see via proposed NDMPs or removing the powers to higher tiers, which we see in a government amendment that will be debated later today. Those options simply remove the connection between the local plan and engagement in its development by local people and communities.

I agree with and support all the comments that were made by the noble Lord, Lord Lansley, about the weight that is given to out-of-date and emerging plans. They need to have that statutory weight, and that needs to apply to all plans that are considered. On recent issues, the development industry, for example—the noble Lord, Lord Deben, mentioned this—has been very keen to stress the importance of it having more certainty in the planning system. Therefore, without clarifying even this element of plan making, about what is out of date and what is not, we leave the “how long is a piece of string” theory in place, which will hold sway in planning. Placing all these matters into guidance, as the noble Lord, Lord Lansley, said, does not give Parliament any role in this; on many occasions recently we have seen what happens when that occurs.

The noble Earl, Lord Lytton, mentioned that the uncertainty about the weight placed on an out-of-date or emerging plan, how out of date it has to be before it is actually out of date, and what a judge is going to say is and is not out of date, damages confidence in and the coherence of our planning system. The noble Lord, Lord Deben, referred to the huge need for people to know where they are, and I could not agree more. If we think we are going to do it anyway, what is the harm putting it in the Bill so that we can all refer back to it? I also thank the noble Baroness, Lady Pinnock, for talking about effectiveness of a plan-led system and the impact that out-of-date plans can have on the delivery of housing targets and the amount of housing needed in local areas.

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[Lord Deben (Con)]

My Lords, some issues continue to affect almost everything we do. One is the principle of subsidiarity—that we should ensure that we do not have a system where all power is centred at the top. That was a very important principle that the Popes upheld when dealing with both the Nazis and the communists, saying that both got rid of all the subsidiarity powers and concentrated them at the centre. Of course those people did so because they were, largely, wicked. The trouble is when it is done by people who think it is the best way forward, and that is what I fear here.

The planning system is obviously not good enough. I declare an interest here, having spent almost a whole year trying to turn a house back into the pub that it was before. You would have thought they would have been keen on all that but, my goodness, there are many complications in trying to do it. However, although we recognise this about the planning system, you do not overcome it by putting on top of that system something that is seen by others as being dictatorial. Unless this power is clearly controlled and confined by the parliamentary procedures that enable it to be used in a way that the public will see is subject to democratic control, then I believe it will fail. It is not just a question of it not being suitable, and it is not just a philosophical question; it is that it will not actually work.

One knows what Ministers have been advised to say: the amendment would make the process more difficult, slower and more complex. Well, sometimes doing things more slowly is a good thing because it gives you time to make sure that you get it right. Sometimes making it more complex is necessary because the issue is more complex, and pretending that it is not means that you make a mistake.

I come back to a question that is particularly affecting me at the moment. We have now seen a number of examples where Ministers have said, “It’s not necessary to do this because we’re going to do it anyway”. I remember Ministers who promised us that we would not sign contracts with other nations that undermined our farmers, but we have done precisely that. We have a case at the moment where Ministers said there would be no diminution of environmental protection and therefore we did not need to put it in the Act, but I fear that is precisely what has happened.

I am in the same position here. I am sure that Ministers intend to do the right thing, and I am sure that Ministers coming from any reasonable party might intend to do so, but, as a former Minister of 16 years, I think it was very good for me to have to do the right thing. That is what I think we ought to put here.

[Baroness Pinnock (LD)]

My Lords, this policy proposal is one of the most contentious issues that we have debated throughout the course of the Bill. So far, it has been a very thoughtful and considered debate about the importance or otherwise of having a centralised group of planning policies imposed on local authorities.

This approach, of having a set of national policies that are imposed on local planning authorities, is not new and does not have a happy history. Even from before my time in local government, some will remember the imposition of county structure plans. Local authorities had to agree to those plans and abide by what was stated in them. That did not end very well. Then in 2004 there was the introduction of regional spatial strategies—this just goes to show that all parties in government have a tendency to centralise—which I remember debating, and they did not end well either. My serious point is that these are messages from history for the Minister and the Government showing that, as the noble Lord, Lord Deben, has said, trying to impose on local communities the Government’s idea of national policies that must be adhered to does not have a happy history.

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[Baroness Hayman (CB)]

My Lords, I declare my interests as chair of Peers for the Planet and I have a close family member who works in this area. The last two contributions have added to the clear exposition of Amendment 191 put forward by the noble Lord, Lord Ravensdale, so I can say very little.

I will just say this. I seem to have spent the last three years in this Chamber trying to persuade the Government that in every area in which we legislate—pensions, financial services, skills or whatever we are looking at—if we believe that this is a crucial issue, as the Government say and the public support, and we want to keep to the legislative targets we have enacted in statute on environmental issues and climate, we have to will the means as well as the ends and we have to do it in a coherent way.

I know very little about the planning system. What I have learned, through a little bit of personal experience of trying to do something green and through listening to briefings on this issue, is that there is not coherence, consistency or a clear direction from government that goes throughout the whole system, as the noble Lord, Lord Lansley, said. The reason why so many outside organisations, such as the construction industry, town planners and people who work in local authorities and want to do this, are supportive of this is that they want a clear framework so that everyone is on the same page on the need for action. Of all the areas I talked about where we have made legislative progress, planning is central—so I very much support Amendment 191.

[Baroness Pinnock (LD)]

My Lords, I think it was the noble Lord, Lord Deben, who said that our planet faces an existential crisis. We must ensure that we take every opportunity to deliver policies and practices that will enable us to tackle the climate change emergency. The noble Lord, Lord Lansley, was right to say that the beauty of Amendment 191 is that it deals with national policy—it could and should be in the national development management policies, but we do not know whether it will be yet—and, equally, is important for local plan-making and local planning decisions. So the amendment deserves and will get our wholehearted support.

Levelling-up and Regeneration Bill

Baroness Pinnock Excerpts

Report stage
Thursday 20th July 2023 Lords Chamber

Government Amendments 154 to 160 relate to compulsory purchase land compensation. They seek to ensure that the compulsory purchase compensation hope value direction measure already included in the Bill applies comparably and consistently in Wales. The amendments are being made at the request of the Welsh Government, who asked for the hope value direction measure to apply to the Welsh Ministers’ CPO powers under the Welsh Development Agency Act 1975 for housing provision and to Welsh NHS trusts’ CPO powers. The amendments will allow the Welsh Ministers and Welsh NHS trusts to include in their CPOs a direction for the non-payment of hope value, providing they can demonstrate that there is a compelling justification in the public interest to secure the direction. I therefore beg to move Amendment 152 in my name.

[Baroness Pinnock (LD)]

My Lords, I thank the Minister for this group of amendments, which largely—not entirely—relate to the rights and responsibilities of Senedd Cymru. Throughout the Bill the Government have had to bring back, as amendments, changes to it to reflect the devolution rights and responsibilities of both the Scottish Government and the Senedd Cymru.

It strikes me as unfortunate that, even 10 years or more after devolution has become fully developed, the Government are still unable to understand that different nations of the UK have particular rights and responsibilities. They are unable to appreciate that or to understand the extent of those rights and responsibilities. It would be good to know that the lesson has reached the distant parts of the Government and that we will have no more of these hasty amendments to put right government legislation impinging on the rights of the devolved nations. Would it not be great if the Minister could give us that assurance?

[Baroness Taylor of Stevenage (Lab)]

My Lords, this group brings up to date the provisions in the Bill so that they are appropriately applied to Wales. It also updates the list of types of compulsory purchase that can be made, subject to common data standards—we accept that this is important. We have had much discussion about the issues of hope value during the passage of the Bill, and it is therefore absolutely right that the Minister responded to Senedd Cymru’s request to make that apply in Wales as well.

I associate this side of the House with the comments by the noble Baroness, Lady Pinnock. It would be helpful if these types of provisions could be consulted on with the Welsh, Scottish and Northern Irish Administrations before they come before this House. But I am grateful to the Minister for listening to the Welsh Senedd’s request, and we are pleased to see these amendments coming forward today.

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On these Benches, we strongly support the amendment submitted in the name of the noble Lords, Lord Holmes and Lord Scriven, and my noble friend Baroness Hayman, on the development of regional mutual banks in the UK. I have seen at first hand how effectively these operate in Germany to support the SME sector, and in his excellent article for City A.M., the noble Lord, Lord Holmes, sets out that in 2021 SME funding was £600 billion in Germany, whereas in the UK it was only £57 billion. I am not going to steal any of the noble Lord’s lines, but he is right in his aim to increase financial inclusion for SMEs. I hope our amendments will be accepted by the Minister. I beg to move.

[Baroness Pinnock (LD)]

My Lords, Amendment 282D in my name would require the Chancellor of the Exchequer to undertake a review of the business rates system. The Government know that the current system is flawed and fails to reflect modern business practices. There have been several Bills in the last few years that have tweaked the non-domestic rating system—as the Minister knows, we have one currently before the House—but these are just tweaks to a complex set of business taxation that is in desperate need of fundamental reform.

The system is basically flawed, as illustrated by the fact that the Treasury pays out billions of pounds in support of small businesses every year, via the small business rates relief. This demonstrates that there has to be a more effective way to levy businesses to support the local services on which they depend.

It is not only me saying that business rates need fundamental reform. Many business commentators have urged for a fundamental review. The Centre for Cities published a report in 2020 which proposed 11 changes to the business rates system. The IFS has published a report pointing to spatial inequalities that are “profound and persistent”.

A fundamental review is long overdue, and the amendment in my name simply asks that a review considers the effects of business rates on high streets and rural areas, and compares that information with an alternative business taxation system—for instance, land value taxation, which was referred to in the IFS report. The spatial inequalities explored in the report are at the heart of the levelling-up agenda. Any detailed review of business rates should gather relevant data on the impact of business rates on different parts of the country.

The Government have recognised what they have called “bricks vs clicks”, and in the Financial Statement earlier this year raised rates for warehousing. However, that steers clear of the major issue facing our high streets, which is the competitive advantage that online retailers have over high street retailers when it comes to the rates applied for business rates.

I have mentioned several times in this Chamber the glaring difference between warehousing for a very large online retailer, which may be at the rate of £45 per square metre, compared with the rate for a small shop in a small town of £250 per square metre. The change to raise the rates for warehousing does nothing to address that vast gap. For instance, it was reported that the change introduced this year by the Government cost Amazon £29 million. That might sound a considerable sum to some people, but it is pennies in the pot for a big online retailer such as Amazon. It really needs to start paying its fair share towards local services. Its little vans whizz round our streets, and Amazon needs to pay for the upkeep of them. The rate of its contribution is small in comparison to the services it uses. That is the argument for a huge, fundamental review of the system as is stands.

We also have to take into account the impact of any changes on local government. A large portion of a council’s income now derives from business rates, and any changes to the system by the Government to reduce the burden on businesses—which they did in the Statement by freezing the multiplier—results in compensation to local government for those changes. This again demonstrates that the system is not fit for purpose.

We currently have a system that says that these are the rates, but oh dear, they are too big for charities, small businesses and so on, and then provides relief which costs the Treasury billions of pounds a year. When any further changes are made, that has an impact on desperately needed income for local councils. Therefore, there will have to be compensation in that regard also. This demonstrates that the business rates system, as currently set up, is really not doing the job it needs to do. I repeat that a fundamental review is essential.

It is important to add that the way in which business rates income is demonstrated, via the tariffs and top-ups arrangements, creates further unfairness This becomes more noticeable as councils struggle to balance their budgets.

A business rates system that encourages business development and growth must be at the heart of any strategy to bring more prosperity and jobs to those areas defined in the White Paper as being the focus for levelling up. I do not need to spell out what that might mean, but it could perhaps be reduced rates for some areas, to encourage development and the movement of businesses to those areas.

The noble Baroness, Lady Taylor of Stevenage, raised similar issues in moving her amendment to support the pub industry, which we support. My noble friend Lord Scriven has signed the amendment in the name of the noble Lord, Lord Holmes of Richmond, who I do not think is in his place, regarding the establishment of regional mutual banks. We support this approach as another way of empowering regional businesses and entrepreneurs to take financial decisions which meet local ambitions, rather than the more risk-averse national banks. The noble Baroness, Lady Taylor of Stevenage, used the comparator of Germany. She is right that the mutual banks in Germany have done much to support their regionally-based industries, which does not happen in this country because of the way our banking system is set up.

I really hope the Minister will be able to say in her reply that the Government accept that the business rates system as currently devised is not fit for purpose and that they are looking to have fundamental review to reform it to the benefit of those places—because this is the levelling-up Bill, and I shall keep saying it: anything we do in the Bill should be in support of the levelling-up agenda. This does not do it, and that is why we need a reform of the business rates system.

[Baroness Scott of Bybrook (Con)]

My Lords, Amendment 163 in the name of the noble Baroness, Lady Taylor of Stevenage, concerns the support for our pubs. We are all aware of the importance of our local pubs; they provide space for people to come together, they provide jobs and they support local economies. But we also know that the past few years have been a challenging time for our pubs, with the Covid-19 pandemic and the current high prices, caused by Russia’s invasion of Ukraine, conspiring to put pressure on already tight operating margins.

Through the pandemic, we recognised that the hospitality sector needed to be more resilient against economic shocks. That is why, in July 2021, we published our first hospitality strategy, Reopening, Recovery and Resilience, which covers cafés, restaurants, bars, nightclubs and pubs.

In 2021—this is important for the issue raised by the noble Baroness, Lady Taylor, of listening to the sector—we also established a Hospitality Sector Council to help deliver the commitments set out in the strategy. The council includes representatives from across the sector, including UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping, as well as some of our best-known pub businesses. While we fully agree with the aim behind the noble Baroness’s amendment, the strategy she asks for already exists.

Moving on to Amendment 279, I notice that my noble friend Lord Holmes of Richmond is not in his place, but the noble Baroness, Lady Taylor of Stevenage, brought it up on behalf of the noble Baroness, Lady Hayman of Ullock, as did the noble Baroness, Lady Pinnock, on behalf of the noble Lord, Lord Scriven, so I will respond. The amendment would require the Secretary of State to report to Parliament within three months of Royal Assent on the existing barriers to establishing regional mutual banks in the United Kingdom and instruct the Competition and Markets Authority to consult on barriers within competition law for this establishment and identify possible solutions.

I make it clear that the Government are supportive of the choice provided by mutual institutions in financial services. We recognise the contribution that these member-owned, democratically controlled institutions make to the local communities they serve and to the wider economy. However, regional mutual banks are still in the process of establishing themselves here in the United Kingdom, with some now in the process of obtaining their banking licences. It is therefore too early to report on the current regime and any possible limitations of it for regional mutual banks.

I know that my noble friend Lord Holmes was interested in how regional mutual banks have performed in other jurisdictions and how we could use these examples to consider the UK’s own capital adequacy requirements. In this instance, international comparisons may not be the most helpful to make. The UK is inherently a different jurisdiction, with different legislation and regulatory frameworks from those in the US, Europe and elsewhere. Abroad, some regional mutual banks have been in existence for centuries and have been able to build up their capital base through retained earnings. In the UK, regional mutual banks are not yet established and are continuing to progress within the UK’s legislative framework.

Additionally, the Competition and Markets Authority plays a key role in making sure that UK markets remain competitive, driving growth and innovation while also protecting consumers from higher prices or less choice. It is very important to note that the CMA is independently responsible for enforcing UK competition and consumer law. The Government cannot instruct the CMA to undertake a consultation. The Treasury is continuing to engage with the mutuals sector and other industry members to assess how the Government can best support the growth of mutuals going forward. I hope that this provides sufficient reassurance to my noble friend on this issue.

Levelling-up and Regeneration Bill

Baroness Pinnock Excerpts

Report stage
Tuesday 18th July 2023 Lords Chamber

Moved by

[Baroness Pinnock]

[Baroness Pinnock (LD)]

My Lords, before I start, I repeat my relevant interests as a councillor and as a vice-president of the Local Government Association.

This group of amendments concerns the Government’s proposal to introduce the infrastructure levy as a replacement for the existing community infrastructure levy—CIL—and Section 106. My Amendment 68 seeks to leave out Clause 129, which establishes the infrastructure levy, and Amendment 90 would delete the relevant Schedule 12.

My reasons for this dramatic action are these. The infrastructure levy as currently proposed is contrary to the purpose of the Bill, which is to enable the levelling up of areas that are defined in the White Paper. The IL fails to contribute to that levelling-up mission because the amount that it will be possible to set as an infrastructure levy rate will be dependent on land values. Land values are much lower in the very areas that are the focus in the White Paper of levelling up. Using the existing community infrastructure levy as an example, land is zoned according to land values. At the independent examination of CIL in Kirklees, where I am a councillor, the planning inspector reduced the CIL charge to nil pounds—nothing—per square metre for a zone which includes the allocated site for 2,000 houses. This is not levelling up.

One of the criticisms of the infrastructure levy is that it will not be site specific. That means that communities that have large housing developments will not necessarily benefit from improved facilities, such as open green space, play areas, and funding to support school places as well as affordable housing on site. Any infrastructure levy can be spent anywhere in the council district.

Another of the major criticisms is that the charge will be paid by the developer only towards the end of the construction period, which may be a number of years. Meanwhile, it is expected that local authorities will have to borrow to build the new facilities needed in the expectation of funding at a sometimes much later stage.

It has also been argued that developers avoid funding infrastructure because of claims about the financial viability of a development. My noble friend Lord Stunell’s Amendment 94 aims to shine a strong light of transparency on viability. I agree with him.

The main contention during the debate on the infrastructure levy was on the provision of so-called affordable housing. There are amendments in the name of the noble Lord, Lord Best, and of the noble Baroness, Lady Taylor of Stevenage, that have the worthy aim of linking the income from the infrastructure levy to the building of houses for affordable sale or rent. We support those aims, but one of the downsides of this approach is that the infrastructure levy is designed to fund affordable housing and local facilities. There is a risk that, in some areas, it would all be spent on housing, which is positive but to the detriment of important local facilities.

Such is the level of concern about the infrastructure levy proposals that representations have been made by more than 30 organisations, including the County Councils Network, the Royal Town Planning Institute, Shelter, the Local Government Association and the National Housing Federation. The concerns expressed are about complexity, upheaval and uncertainty.

Finally, the Government have stated that the infra- structure levy will be in a test and learn state. This creates further uncertainty. Further, because the infrastructure levy is to be phased in, developers will be dealing with different charging regimes in different parts of the country for many years to come. That clearly adds to uncertainty and complexity for developers. Perhaps the Government have lost confidence in the scheme as proposed.

The difficulty with the infrastructure levy is that this is not the right time to change developer charging systems, nor will it provide sufficient funding at the appropriate time to fund affordable housing and local facilities for developments. It is time for a total rethink. I will listen very carefully and closely to the Minister’s response. If I am not entirely satisfied with the response she provides, I will be minded to test the opinion of the House. I beg to move.

[Lord Stunell (LD)]

My Lords, I rise to speak to Amendments 70 and 94 in my name in this group. I want to add my strong support to Amendment 68, moved by my noble friend Lady Pinnock, which aims to get rid of the IL altogether. She has spoken very powerfully to that point, saying not least that it is contrary to the central purpose of the levelling up White Paper and to the whole substance of the mission statements, which are set out—or rather, the skeletons of which have been laid—at the front end of the Bill.

The complexities and the unintended consequences of the infrastructure levy were explored in depth in Committee. The Government are now reduced to saying that it will be piloted first on a “test and learn” basis, and that it may be introduced piecemeal over the next decade rather than as a big bang, which I suppose is the beginning of some sort of reality check. The Government’s own amendments, which are in this group and which we shall hear about shortly, are an attempt to water it down a bit further. As my noble friend said, the Government seem to have rather lost confidence in the infrastructure levy providing the solutions that they originally imagined.

Well, we are a little bit ahead of the Government. We have completely lost confidence in the infrastructure levy as a vehicle for positive change on the delivery of affordable homes or indeed decent infrastructure associated with new development. The infrastructure levy is beyond repair. This duck is dead. I certainly hope that, if my noble friend Lady Pinnock does not get the assurances that she is looking for and a vote is called, noble Lords will go into the Content Lobby with her.

I wait to hear what the noble Baroness, Lady Taylor of Stevenage, has to say about Amendment 69 and what the noble Lord, Lord Best, has to say about Amendment 71. I would say that what they are offering is palliative care rather than resuscitation of the levy. Either or both of those amendments would be definite improvements on anything the Government have tabled, so I will wait to see what is said about that.

The noble Lord, Lord Lansley, has tabled Amendment 311, which is an admirable setting out of preconditions—preconditions which are so obvious and sensible that I fear the Government will reject them out of hand. Instead of seeing this for what it is—an attempt to introduce sound legislative principles into the Government’s Bill management, which I would have thought they would welcome—I suspect they will just see it as some kind of amendment to kick the whole project into the long grass. But in default of anything else, will the Minister please give the noble Lord, Lord Lansley, some help with getting those preconditions written into this model?

I turn to my Amendment 70. This returns to the vexed issue of what is affordable when we talk about affordable homes. Affordability is used in legislation at present based on the idea that, provided that there is a discount on the going market rate, a home in the private sector is thereby affordable. It is currently a standard discount, which takes no account at all of incomes in the locality, nor does it pay any attention to price differentials between similar homes. For instance, similar homes in an outer London borough such as Sutton, where I was born, are a factor of two more expensive than those in the metropolitan borough of Stockport, where I live. So for “affordability” to mean the same in the two boroughs, incomes in Sutton would need to be double those in Stockport to match the ratio of incomes to the discounted sale prices in the two boroughs.

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[Baroness Pinnock (LD)]

My Lords, I thank all noble Lords for their contributions and challenges to what I have said during this important debate. I particularly thank the Minister for being so generous with her time prior to Report in order to discuss these issues and to respond so constructively to the elements raised in Committee about affordable housing concerns, as well as for having spoken so persuasively—although maybe not quite persuasively enough—in response to this debate, giving as always a full reply to all the issues that were raised.

I come back to the fact that this is not about reforming a planning system; it is a levelling-up Bill, part of which will have to look at how we build more social and affordable housing, and communities that are healthy, safe and ready for the future. However, I come back to the fact that was raised by the Minister: these regulations could be disapplied by some local authorities if the development was deemed economically unviable to raise the funding. Those are the very same places which this Bill and the Government’s own White Paper wanted us to focus on, to raise up those communities so they can enjoy the same level of prosperity as other parts of the country. I repeat that the CIL level in a large part of the authority which I represent was set by the planning inspector at zero. That is the problem with the infrastructure levy. The example that the Minister gave of Pendle demonstrates that some authorities will not be able to build enough affordable housing under this system.

The organisations that wrote to the Secretary of State retain many of the concerns about the infrastructure levy. The system remains complex and very uncertain, for developers and for local authorities. It will be expensive to operate, and difficult to set the levy at the right level. I accept there is a need for reform of the existing CIL and Section 106, but this is not it. This is adding on something, as we have heard, so that we will have three different systems running side by side. People and developers will be confused, and local authorities will not be sure how much money they will be able to raise.

I hear the strength of feeling the Minister expressed in her response to the debate. Nevertheless, given all those worries that I have—fundamental concerns— I beg leave to test the opinion of the House.

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[Lord Lansley (Con)]

My Lords, I want to speak to Amendments 96 and 98, to which my noble friend Lord Young has just spoken so eloquently and compellingly. I share with him a sense of gratitude to our noble friends for the time they have given and for the way in which they have addressed a range of concerns. However, I have to confess that not least my noble friend’s detailed examination of community land auctions in theory caused me to inquire of several people how it might work in practice, although we have not seen that in reality. Those are a few hours of my life I shall never see again, but the conclusion I reached at the end of that was that it will not happen. That is probably the main reason why my noble friend may choose not to press this amendment to a Division to remove this provision from the Bill: it will sit in the Bill, it will become part of the Act and it will never see the light of day beyond that point.

Why? First, because as we have just debated, Part 4 provides for what is, in effect, a mandatory system for all local authorities for deriving developer contributions. Unless that is an utter failure, I cannot see why local authorities would want to go down the path of community land auctions, as opposed to having a much fairer and more equitable system of levy. Secondly, let us look at how it actually works. My noble friend is saying that the regulations will tell us in due course under what circumstances a local authority can enter a scheme. Clause 133(2) says:

“The local plan may only allocate land in the authority’s area for development … if the land is subject to a CLA option or a CLA option has already been exercised in relation to it”.


So, in preparing a local plan—this is before the planning process is completed, so following a call for sites—the local planning authority must seek options from all the sites put forward before they are chosen to be allocated or not to be allocated.

Let us have a look at that. I declare my interest again as chair of Cambridgeshire Development Forum. In 2019, in preparation for a local plan, the Greater Cambridge Shared Planning service issued a call for sites. It received 675 applications. In 2020, it allocated 19 sites. We therefore have, I think, in this joint plan area, 656 sites that have to go through the process of agreeing a community land auction option and disclosing the price—actually, as the lawyers rightly tell me, not only disclosing the price, which many landowners and developers will resist, but agreeing a legally watertight potential option before the point at which the allocation is made. These options will cease to have effect only when the plan is adopted or approved. In this instance, that is expected to be in the middle of 2025, just ahead of the Bill’s cut-off date. That means that, under these circumstances, the community land auction options would subsist for nearly six years, during which 656 sites will be held in abeyance and nothing can effectively be done with them. The price on those 656 sites, at which they are willing to sell, would have been disclosed, while the actual value will continue to change.

I do not see any evidence that local planning authorities have any desire to go down this path and engage in this process. Of course, it is optional, as my noble friend will no doubt remind us—local planning authorities do not have to do it. The conclusion I have reached is that they will not do it. Therefore, in reality, my noble friend did the Government a service by suggesting that it be taken out and the Bill be lightened. As it happens, I suspect Ministers will not do that, but I think they must be realistic and understand that this is proceeding with very little chance of success.

[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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For me, “overall” means “on the one hand, on the other hand”; it means trade-offs. We all know that trade-offs notoriously diminish levels of protection and often promise jam tomorrow that never materialises, so I am deeply suspicious of anything that looks at overall levels of environmental protection when we are in fact assessing a mechanism that will look at specific cases over time. I believe that Amendment 106 in the name of the noble Baroness, Lady Hayman, would provide a much more robust assurance and non-regression test by taking “overall” out of the equation, so I hope that the House will support the noble Baroness’s amendments.

[Baroness Pinnock (LD)]

My Lords, this is an important set of amendments from the noble Baroness, Lady Hayman of Ullock. They seek assurances from the Government that the replacement for the existing environmental tests for development—environmental outcomes reports—will be as robust as the ones they will replace.

The noble Baroness, Lady Hayman of Ullock, made a powerful case for a non-regression clause with her Amendment 106. Recently, there has been a lot of debate about this and pressure from those who want to point the finger of responsibility at the planning system for failing to produce the right number and quality of homes that are desperately needed in this country. When they do so, they point out the additional responsibilities of developers to adhere to environmental responsibilities and regulations, which are causing the difficulties they express. Of course, it is never as easy as that.

It seems to me that, after many years, as the noble Baroness, Lady Young, said, we have a much better balance now between development and protection of the environment in which developments are set. There are responsibilities that developers have to take up in order to make sure that they construct and do not destroy; to make sure that they create communities that sit well in their environment; and to make sure that nature and the environment are looked after for existing and future generations. So the noble Baroness, Lady Hayman, has made important points here; I hope that the Minister will be able to respond positively to them, because they are important. I guess that they will be raised again later on in our debates on Report.

[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.

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[The Earl of Caithness (Con)]

One of the problems that I raised during our debate on 18 May in Committee was the problem of surface water run-off from farms and roads, which was causing problems for our rivers. I am extremely grateful to and would like to thank my noble friend the Minister for the letter that he sent me on 23 June, in which he commented a bit more on the points that I raised. The interesting thing about that letter was his comment on the surface run-off from roads. He said that Defra was

“working with the Department for Transport to reduce the impact of the strategic road network and roads managed by local highways authorities on water bodies”.

It just shows what an important cross-government issue this is.

The difficulty that my noble friend has is that he has to work at one remove from the local authorities. The reason I stress the local authorities is that the next day, on 19 May, I was on the River Piddle, a lovely chalk stream, and at 3.30 pm the river was gin clear—it was what a chalk stream should be. We had quite a good thunderstorm and within an hour that river was chocolate brown; it was full of silt and run-off, and the roads were under water. There was run-off from the farmland adjacent to the river—the whole aquatic environment of the river was affected by that thunder- storm; it was a short-term disaster for the river, created by human behaviour. Something similar happened to us humans when we had the smog in the early 1950s. We tackled that problem; it was a manmade problem and we tackled it with the Clean Air Act. It is equally important that we now tackle the problems facing our rivers. It will take a major effort by the Government and across government to do that.

All our rivers are important, but why are the chalk streams just that bit more important? It is worth reiterating that 85% of the world’s chalk streams are in England; they are our equivalent of the rainforests. We have a special responsibility to those rivers, and if we do not give a lead to the rest of the world on such an important issue, we will not be doing nature justice.

There are three key indicators of the ecological health of rivers: water quality, water quantity and the physical habitat. The key to getting all of those right is management. The Government will need every single tool in the toolbox and every policy to be able to take the necessary action to fight off the vested challenges from all quarters that they will need to do to establish chalk streams to the standard that we expect and fulfil the one big wish, so rightly mentioned by my noble friend Lord Trenchard.

The Bill is about regenerative action and levelling up, and it is intended to give places a sense of identity. As my noble friend Lord Trenchard said, many of the rivers flow through towns as well as the countryside. The restoration of the rivers could bring huge opportunities and benefits to those towns and to the countryside for both nature and humans. If we do not take this opportunity, we will be letting nature and ourselves down.

[Baroness Pinnock (LD)]

My Lords, my noble friend Lady Bakewell of Hardington Mandeville is unfortunately unable to attend today, as she is not well. I will say a few words on her behalf.

First, I endorse entirely what has already been said about the environmental importance of chalk streams. I think it was David Attenborough who described them as one of the rarest habitats on earth. If David Attenborough says that, we must listen and listen carefully.

Secondly, I want to say something about pollution and about water extraction. The Environment Agency has responsibility for giving permission to water companies for the level of extraction, be it from rivers or aquifers. Indeed, there are aquifers in Yorkshire—not in my part, but in the East Riding—which Yorkshire Water extracts from. What I do know is that aquifers take a long time to refill after periods of extraction. I look to the Minister to respond on water extraction from aquifers. The amount of water taken from aquifers obviously then impacts on the flow in chalk streams, which is essential for their protection.

What I want to say about pollution from sewage overflow discharge is this. About 150 years ago there was a Conservative Prime Minister in this country who had a policy of sewage. That is exactly what this country needs now. A Conservative Government run this country, so perhaps they can adopt Disraeli’s policy of sewage. It would be a bit late, but it would not be before time if they did.

[The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

I am very grateful to the noble Baroness and others who have spoken. The noble Baroness should read our Plan for Water, which does exactly what she said. I refer noble Lords to my entry in the register.

I turn to Amendment 102, in the name of my noble friend Lord Trenchard. I defer to no one in the verbal arms race that usually takes place in these debates about who can be the greatest supporter of chalk streams. I am passionate about them, and I want to see our chalk streams, which are one of the most valuable ecosystems in these islands, restored to pristine health. I note the passion from across the House on the need to protect these habitats further.

The Government recognise that chalk streams in England are internationally important and unique, and in many cases in poor health. We are committed to restoring England’s chalk streams. We have recently reaffirmed this commitment in our Plan for Water, which I just referred to, which recognises chalk streams as having special natural heritage.

Levelling-up and Regeneration Bill

Baroness Pinnock Excerpts

Report stage
Thursday 13th July 2023 Lords Chamber

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

My Lords, in moving government Amendment 34, I shall also speak to Amendments 40 to 42, 44 to 50, 55 to 57, 290, 297 and 306.

Amendments 34 and 306 give those preparing for and running the proposed east Midlands CCA mayoral elections in May 2024 early clarity as to the rules. Amendment 306 commences Clause 25 and Schedule 2, which contain the relevant powers upon Royal Assent. Amendment 34 enables the statutory consultation with the Electoral Commission, and the commission’s recommendations as to candidate expense limits, to occur before commencement in the east Midlands.

Amendment 50 amends Schedule 4, the current drafting of which provides only for mayoral combined authorities and mayoral combined county authorities to input on local skills improvement plans covering any of their area. However, the devolution framework in the levelling up White Paper states that this will be available to all CAs and CCAs and individual local authorities with a devolution deal. This amendment will allow all CAs and CCAs, including those without mayors, as well as local authorities with devolved adult education functions, to have their views on the relevant local skills improvement plans considered by the Secretary of State. These alterations will allow devolution deals in areas with devolved adult education functions to be fully implemented.

Amendments 55, 56, 57, 290 and 297 seek to amend Clauses 65 and 231. In its 24th report, the Delegated Powers and Regulatory Reform Committee recommended that any regulations regarding the membership of CAs and CCAs, as made through powers confirmed by Sections 104C and 107K of the Local Democracy, Economic Development and Construction Act 2009 or this Bill should be subject to the affirmative resolution procedure rather than the existing mixed resolution procedure, whereby only the initial statutory instruments made are subject to the affirmative process. I thank the committee for its work in relation to the powers in the Bill. These amendments accept that recommendation and will ensure that an appropriate level of scrutiny is achieved for regulations relating to membership of CAs and CCAs.

The remaining government amendments in this group are all consequential, amending the Equality Act 2010 and the Localism Act 2011 to apply provisions in these Acts to CCAs to allow the model to work in practice. Given their importance in allowing CCAs to operate as a local government institution, and to enable the first CCA mayoral election, I hope that noble Lords can support these amendments.

[Baroness Pinnock (LD)]

My Lords, I begin, as I generally do, by reminding the House of my relevant interests as a councillor and a vice-president of the Local Government Association.

I wish particularly to speak to government Amendment 34. I was quite astonished when I read it; it brings to the Bill a new issue that has not been discussed previously either at Second Reading or in Committee. I was also astonished because the amendment attempts to bypass the independence of the Electoral Commission. The commission was established to improve trust in our electoral arrangements. That is its function, and we rely on it to provide its stamp of approval for the arrangements made for elections.

To use a strong word, this is quite a pernicious amendment because it attempts to bypass the independent consultation of the Electoral Commission. I will tell the House what it says. The Bill, in its Schedule 2, currently expects the Electoral Commission to be involved in setting the arrangements for mayoral elections. On page 286, paragraph 12(4) states that

“the Secretary of State must consult the Electoral Commission”

and in sub-paragraph (5) that

“the power of the Secretary of State to make regulations … is exercisable only on, and in accordance with, a recommendation of the Electoral Commission”.

Government Amendment 34 states that the requirements in the two sub-paragraphs I have just quoted

“may be satisfied by things done before the coming into force of this paragraph”.

In other words, the Government are going to bypass those requirements. That cannot be right.

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[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?

[Baroness Pinnock (LD)]

My Lords, this amendment is really important for democratic overview of policing in a combined authority area. As the noble Lord, Lord Hunt of Kings Heath, has said, West Yorkshire already has a mayor and a non-elected police and crime commissioner, because the arrangement for West Yorkshire—sadly, in my view—was that the two roles would be combined. The elected Mayor of West Yorkshire is therefore also responsible as police and crime commissioner. The consequence of combining those two roles has been that the Mayor of West Yorkshire was able to appoint a police and crime commissioner for West Yorkshire.

The whole concept of police and crime commissioners was that there would be democratic accountability for the oversight of policing in a police service area. In West Yorkshire and other places, I think including Manchester, that democratic accountability has disappeared because the mayors in those places—I live in West Yorkshire so I know the situation well—have appointed people they know as police and crime commissioner.

That is no reflection on or criticism of the job that that individual does, but it is a criticism of the lack of democratic accountability. If the oversight of police and crime in a very large area—2.5 million people—is given to an appointed person and the electorate cannot vote them out of office, there is something fundamentally wrong with the system. That is why Amendment 54 in the name of the noble Lord, Lord Bach, and introduced by the noble Lord, Lord Hunt, is so important. The Government have gone in the wrong direction on this one. If we are to have police and crime commissioners, they need to be elected, as they are everywhere else in the country.

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[Baroness Scott of Bybrook (Con)]

My Lords, I thank the noble Baroness, Lady Hayman of Ullock, for outlining her rationale for tabling Amendment 36: to clarify the relationship between PCCs and mayors, and their respective roles and responsibilities. She asked if the Government want to phase out PCCs. There is no intention to do so. The intention is to allow mayors only in some areas to exercise PCC functions. Some areas will never have mayors who do so because only in coterminous areas can mayors take those functions.

The levelling up White Paper set out the Government’s aspirations for—

[Baroness Pinnock (LD)]

The noble Baroness said that you could have a combined police and crime commissioner and mayor only where there is coterminosity. If combined authorities are now able to expand, will that undo that requirement?

[Baroness Scott of Bybrook (Con)]

No. I hate to bring up the West Midlands—I know the noble Lord opposite will be very pleased that I am—but the Mayor of the West Midlands has a choice: he can either agree to pursue the expansion to include Warwickshire, which has its own PCC, so he could no longer take the PCC role, or he can take the PCC role and therefore not Warwickshire. That is the reality of what we are doing. I hope I have explained that.

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[Baroness Seccombe (Con)]

My Lords, I disagree wholeheartedly with my noble friend. In the lockdown period, I thought it was awful when people had to vote remotely and were charged with being on a beach somewhere. I believe that, in politics, we need each other; we need debate and discussion and to hear other points of view. I believe that doing that in person is right for a healthy democracy.

[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.

Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2023

Baroness Pinnock Excerpts

Wednesday 12th July 2023 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I warmly support these regulations and congratulate my noble friend on bringing them forward. My only concern is about the ability to reach out and consult organisations representing the disabled, which I will come to in a moment.

In her introductory remarks, my noble friend mentioned what this will mean for the hospitality sector, and I warmly support that for the reasons she gave. The sector suffered heavy losses during the Covid pandemic, and it is gratifying that tourists are now returning to areas such as London—and North Yorkshire, to a certain extent—in waves that we have not seen since the pre-pandemic days of 2019. That is very welcome.

I had the good fortune and honour to chair the ad hoc Select Committee on the Licensing Act 2003 and, similarly, the follow-up committee. I was delighted that the Liaison Committee allowed us to conduct a further, follow-up inquiry. One of the issues that struck us during that inquiry was how to reach out to interested affected groups, such as organisations and groups representing the disabled, and how best to catch their attention if there was a licensing application that may be of interest or concern to them.

Can my noble friend put my mind at rest in that regard? I think she said that each individual licence is subject to a seven-day consultation, so I would like to know what mechanism local authorities use in that regard.

I note that paragraph 10.1 of the Explanatory Memorandum attached to the regulations says:

“No formal consultation has taken place on this measure”.


Perhaps one would not have expected a consultation for the reasons that my noble friend gave, that this is a continuation and a renewal. This is my main concern here. We all know disabled people and partially sighted people—they are represented in both Houses of Parliament. One error of these regulations, or any licensing application applied under them, would be if those people were not reached out to under each individual licensing application.

On a lighter note—this is not really about a pavement application—when coming back down St Martin’s Lane in the daytime today, I passed Stringfellows, which is a well-known restaurant establishment, and I was rather struck by an orange leaflet that had great prominence on two of its doors. It has applied for a renewal of a sex establishment licence as a sexual entertainment venue. I realise that this is without the remit of today’s debate, but I will write to my noble friend with a copy of the notice. We spent hours looking line by line through the Licencing Act 2003; I like to think that I am fairly interested in licensing, but it was news to me that we have any sexual entertainment venue licensed in London or any other part of this country.

I look forward to my noble friend’s response on the consultation, not just of these regulations but of each individual licence application under the regulations before us.

[Baroness Pinnock (LD)]

My Lords, that conjures up a new image of a pavement licence for Stringfellows.

I had better remind the Committee of my relevant interests in this regard as a councillor and as a vice-president of the Local Government Association.

The pavement licencing regulations are very positive and I am pleased that they will be rolled over. I have one or two questions. Even in my less-than-warm part of Yorkshire, this has been a positive move—that is the good news. However, I wonder why, when these regulations were first considered, there was no thought about an automatic rollover for businesses that had made an application and had fulfilled their obligations under the licence, and about which there had been no complaints. For businesses there is now additional bureaucracy every year when they have to make an application to the local authority. That is my first point.

I have raised my second question before. Businesses now have the opportunity to trade on the public highway. The public highway is owned by the public and must be maintained by the public. One wonders whether there ought to be a rental income for the local authority from the business for the use of the highway. Local authorities are cash-strapped as it is, and any form of additional income would be welcome. I say that because I think the licence income is very small; I think I heard the Minister say it was £100 maximum. Some establishments use quite a lot of their highway if they have a good frontage, and there ought to be some income there for the local authority.

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[Baroness Scott of Bybrook (Con)]

My Lords, I thank noble Lords for their contributions on these draft regulations. As I previously outlined, these regulations continue our support for the hospitality sector’s economic recovery from the coronavirus pandemic and give support to businesses in uncertain times with global inflation. As we have heard, this extension will give businesses extra support for another year. I thank noble Lords for their support for that across the Committee.

A number of points were raised, and I will go through them. Accessibility was quite rightly bought up by my noble friend Lady McIntosh of Pickering and the noble Baroness, Lady Taylor of Stevenage. This is very important. I have met my noble friend Lord Holmes more than once about this issue. I continue to talk to him. Of course, pavements must always be accessible to everyone, regardless of their mobility needs. As such, this condition applies to all temporary pavement licences issued by councils. If the conditions are not met, the licences can be revoked.

The pavement licence guidance says that in most circumstances a minimum of 1.5 metres of space should be kept clear between an obstacle and the edge of the footpath. That is for everyone, whether it be wheelchairs, buggies or just people who need a little more space to walk safely around our town. This will continue to apply under the extended provisions. We work with disabled people through the Disabled Persons Transport Advisory Committee, the Royal National Institute of Blind People and the Guide Dogs for the Blind Association. This guidance has always been refined even further after speaking to them, to ensure that local authorities consider the needs of all people when setting conditions and making decisions.

In terms of local particularities, because areas differ, local authorities may also wish to review any local conditions they have set in relation to access and safety. That is really important. Local people know best about their towns and villages. The noble Baroness, Lady Pinnock, asked about automatic rollover. I can understand the reasoning behind this, but we want to ensure that the community continues to have a say. We know that in communities some people may say that it is fine, but I think we should ask, so we need an annual consultation just to check that everything is going right, and that people are happy with what is being delivered.

The noble Baronesses, Lady Taylor of Stevenage and Lady Pinnock, brought up the issue of income for local authorities. There is always a balance between money for the council and the cost to businesses. The £100 is a cap. Some local authorities do not charge anything; I was hearing of one such the other day. They may be much wealthier councils than others so can afford to do that, or they may prioritise small businesses at a particularly difficult time, but it is a cap. Looking further towards the future, the Levelling-up and Regeneration Bill that is going through the House looks at higher levels of cost to businesses. Again, though, they will be caps; they will not be required to be charged. It is important that local authorities have the flexibility to do that.

The noble Baroness, Lady Pinnock, mentioned visible barriers. I will take this issue back and we will have another discussion about it. I certainly know from personal experience that al fresco dining is wonderful; it makes our streets look so much more interesting at times, and it is lovely to sit out. However, the ones with the barriers around them seem much more sensible to me. I will take that back to the department. I will not forget; I will come back to her.

[Baroness Pinnock (LD)]

I thank the Minister for doing that. My worry is that I think that was initially included in the first set of regulations, and I wonder why it has somehow been taken out. But I will wait for an answer.

[Baroness Scott of Bybrook (Con)]

I am interested in the answer as well, so I will definitely come back to the noble Baroness on that.

As I say, the measure also refers to the issue of non-domestic rates, mentioned by the noble Baroness, Lady Taylor of Stevenage. Non-domestic rates are important revenue for local authorities. Again, it is about balance: if you lower them for businesses, that is good for businesses, but then we have to make that up in some way for local authorities.

I think I have answered everything. I will check Hansard tomorrow, and obviously I will send a letter if necessary. Did I miss something?

Levelling-up and Regeneration Bill

Baroness Pinnock Excerpts

Report stage
Tuesday 11th July 2023 Lords Chamber

[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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[Lord Teverson (LD)]

My Lords, I will speak briefly to the amendment from the noble Lord, Lord Berkeley. I have worked in various guises on trying to preserve the sea link between Cornwall and the Isles of Scilly for some 25 years now. The Isles of Scilly Steamship Company is trying to undermine what is absolutely essential but has not been able to happen over 25 years: private funding of that ferry service. I believe that this cannot happen at the moment. Never mind the fares for the future: fiscally, it will not work as a scheme. That means that the money will be lost and, after 25 years, the “Scillonian” will not be replaced and those islanders and their economy will be cut off from the mainland. That is why this amendment is important, and I too hugely thank the Government for the generosity and understanding that they have shown to the islands and west Cornwall in terms of the levelling-up funding.

[Baroness Pinnock (LD)]

My Lords, I remind the House of my relevant interests: I am a councillor on Kirklees Council in West Yorkshire and a vice-president of the Local Government Association. This group of amendments focuses on the areas that have benefited, or not, from the initial round of the levelling-up fund. As we heard from the noble Baroness, Lady Hayman of Ullock, there are many examples of levelling-up funds failing to reach those parts that the Government’s own White Paper assesses as being in need of targeted funding over a sustained period.

Throughout our considerations of the Bill, I have said that this vast tome, the levelling up White Paper, should be at the heart of what we are discussing and what the legislation should be doing. As I said in Committee and at Second Reading, it seems to me that the Government have lost their way. The White Paper is not perfect, but it makes a good start in setting out what levelling up should be about. One of the phrases in it is that levelling up should be “broad, deep and long-term”—I agree. Experience of previous iterations of levelling up, from city challenge to neighbourhood renewal and several other policy interventions in between, has demonstrated that scattering plugs of funding is not sufficient to ensure that communities that have not shared in the nation’s prosperity begin to do so. The cycle is not broken without dedicated and long-term investment; that is what the White Paper says. The fundamental approach currently being pursued is inadequate to meet that challenge.

The Government have so far distributed funding via a bidding culture, which, as many noble Lords will know, the Conservative Mayor of the West Midlands has criticised, calling it a “begging bowl culture”. Such a bidding culture is also costly, in time and money, and leads to many more losers than winners. One example, which I think I have given before, is a major city in Yorkshire investing a six-figure sum in its bid for levelling-up funds only to receive a big fat zero. It seems to me that this process needs a fundamental rethink. The noble Baroness, Lady Hayman, was right to use the example of the House of Commons Select Committee on this very issue, but the National Audit Office has also raised concerns about the use of levelling-up funds and how the bidding culture has worked —or not.

If the Government were serious about levelling up, only those areas that are amply described in the levelling up White Paper would qualify for funding. The Minister may be able to tell us whether only those areas described in the White Paper will qualify for funding. If not, we are moving away from the purpose of levelling up.

The second element of change needs to be for local authorities. Those that qualify via the assessment and the metrics in the White Paper should be asked to produce plans that tackle the inequalities at the heart of their communities in a sustained way—that is what the White Paper says needs to be done. It would mean more emphasis, for example, on skills, access to employment, and barriers, such as lack of childcare and transport. However, given what the Minister said in Committee, I am not sure whether the Government are ready for such big changes.

The noble Baroness, Lady Hayman of Ullock, is right to pursue making the use of levelling-up funding more transparent and, as Amendment 3 says, ensuring that the funding is linked to the missions. For me, at the heart of levelling-up and regeneration legislation should be linking funding to the missions. If they are not linked, I do not know what the purpose of this Bill is.

At this point, the noble Lord, Lord Berkeley, raises a good example of what happens when there is an inequality of immense proportions. My noble friend Lord Teverson supported him in that, and he was right to do so. There are countless examples of such disparities across the country, which the levelling-up fund should be dealing with.

These amendments are fundamental to the effective levelling up of the many parts of this country that have suffered inequalities—some of considerable proportion compared with the rest of the country—over many years. If the noble Baroness wishes to move her amendment to a vote and divide the House, we on these Benches will support her.

[Baroness Scott of Bybrook (Con)]

My Lords, Amendments 1, 17, 304 and 305 in the name of the noble Baroness, Lady Hayman of Ullock, are all linked to a proposed new requirement for government to lay a statement detailing the application process for round 3 of the levelling-up fund. That has already happened in the first two rounds of the fund. We published information on the impartial assessment and decision-making process, alongside a full list of successful applicants. We have also provided feedback to unsuccessful applicants in both rounds. We will continue to improve the process used to award funding, taking on board the feedback we have received, which will be reflected in our approach to the next round of the fund.

We have also published our monitoring and evaluation strategy, which makes clear how the fund will evaluate impact against a range of criteria, including healthy life expectancy, well-being and pride in place. On the timing of the statement of the levelling-up missions, which is mentioned in Amendment 1, we have committed in the Bill to publish this within one month of Part 1 of the Act coming into force. We argue that this is already an appropriate and prompt timescale.

Amendment 3, also in the name of the noble Baroness, Lady Hayman of Ullock, looks at how levelling-up funds are supporting the levelling-up missions. This Government are committed to transparency. The Bill will place a duty on the Government to publish a clear statement of their levelling-up missions and to report annually on their progress against them, including, where relevant, the contributions made by particular projects and programmes. We have also already published transparent criteria for assessing projects and initiatives to be funded via key levelling-up funds and have published all funding allocations made to places.

In relation to the levelling-up fund specifically, in round 2 of the fund we asked applicants to set out which of the 12 levelling-up missions their bid supported. Several of the criteria used in the levelling-up fund evaluation strategy align closely with our missions, including pride in place, health and well-being. Alongside that, transport forms one of the three investment themes, and more than £1.1 billion has been awarded to improve transport infrastructure in the first two rounds.

It might be useful to give some examples of what has happened. Torridge District Council made a bid for the Appledore Clean Maritime Innovation Centre. That will create North Devon’s first university research centre, which will help regional skills by providing a regional skills base, as the noble Baroness, Lady Pinnock, said. It will also establish the area as a leading research and development destination for clean maritime. Another example—I will not go on, because I could give noble Lords a large number—is the Porth transport hub, which will open later this summer. It will improve transport connectivity by providing seamless public transport connectivity for that town. These are the things that are happening.

The noble Baroness, Lady Hayman of Ullock, also asked about the rest of the money that the Government are spending and whether it will be spent in connection to the missions. I can say that £40 million from the DfE has gone into education investment areas, one of our priorities in the missions, while £2.5 billion has been allocated to the transforming cities fund and many billions more to the city region sustainable transport settlements and the bus service improvement plans. There is also £125 million from the Home Office for the safer streets fund. These are all connected to our very important missions.

The noble Baronesses, Lady Pinnock and Lady Hayman of Ullock, quite rightly asked about simplifying the funding landscape. We have already made significant progress in streamlining funds. Between them, the levelling-up fund and the UK shared prosperity fund consolidate what was previously a complex landscape. We are committed to publish a simplification plan setting out how we will go further, immediately and at the next spending review, to simplify the funding landscape far more.

The noble Baroness, Lady Hayman of Ullock, also talked about evaluation. We have an overall departmental evaluation strategy, which was published last November. Over the past 18 months, the department has significantly increased the resource dedicated to local growth evaluations, and that will continue—so we are looking particularly at including towns funds, the levelling up fund and the UK shared prosperity fund.

The noble Baroness also asked why it has taken so long to share information about the levelling up fund round 3. It is important that we have taken the time to reflect on the first two rounds, which is why things are changing. We have learned the lessons from those two, and we wanted to do that before committing to round 3. We will talk about it further in the near future. The Secretary of State signalled at the LGA conference last week that he intends to bring a completely new approach to the levelling up fund round 3, reflecting on everything that has happened up until now.

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[Baroness Benjamin (LD)]

My Lords, I support the amendment in the name of the noble Baroness, Lady Lister, and thank her for her commitment to striving for fairness and equality and to eradicating child poverty for the nation’s most disadvantaged children.

An effective way in which the Government could improve our children’s health and well-being is to tackle child poverty. To do that, there must be a clear strategy. What better way to do that than by placing this amendment as a mission in the levelling-up Bill, to reduce the proportion of children of all ages living in poverty? Surely it is an obvious place for this amendment to sit.

The evidence on child poverty and its disastrous effects is becoming increasingly apparent. The Households Below Average Income report published by the DWP states that 350,000 more children were pulled into relative poverty in 2021-22. That means that 4.2 million children—29% of our UK children—were in poverty, up from 3.6 million in 2010-11. This is worrying because it will only continue to rise in 2023, given the cost of living crisis and the high mortgage rates hitting families harder and harder by the month.

Research has shown that there are geographical disparities across our nation, but there are also significant differences between the child poverty rates in ethnic groups. Children from black and minority-ethnic groups are much more likely to be in poverty—48%, compared with 25% of children in white families.

It is also disheartening to know that work does not provide a guaranteed route out of poverty in the UK. Unbelievably, 71% of children growing up in poverty live in a household where at least one person works. Is that not depressing? Between 1998 and 2003, reducing child poverty was made a priority. There was a comprehensive strategy and investment in children. The number of children in poverty fell by 600,000. That is what you call a mission of levelling up.

As I keep saying, childhood lasts a lifetime, so it makes financial sense to invest in our children as early as possible. Perhaps having a Cabinet-level Minister for children would help this mission. This year, research by the Child Poverty Action Group showed that child poverty cost the economy almost £40 billion a year.

In order for children to function at their best, especially in school, they need a proper, balanced diet. Shamefully, we are seeing a nutritional postcode lottery for our children. For example, some fantastic work is being done in London, meaning that all children in primary schools will receive a free school meal. In boroughs such as Tower Hamlets, all secondary school children will do too. Yet, if you travel outside of London to areas known for economic deprivation and high levels of child poverty, we find that the same children in need of a decent meal are unable to receive a free school meal, unlike their counterparts in London.

Without lifting children out of poverty, levelling up will not have the long-term positive impact that the Government hope to achieve through the Bill. If child poverty keeps at this high level and keeps on growing, children’s prospects will suffer, cancelling out any other positive aspects of the Bill. I plead with the Government and all noble Lords to support this amendment, whose mission is to reduce the number of children of all ages living in poverty in all its forms, as one of the Bill’s levelling-up missions.

[Baroness Pinnock (LD)]

My Lords, this group of amendments seeks to persuade the Government to be more specific about the missions and metrics of levelling up. I wish to speak initially to Amendment 8 in my name.

I remain very disappointed that the Government have failed to include their White Paper missions in the Bill. It makes me ask whether there is some shame on the Government’s part in stating clearly in legislation that our country has the worst levels of regional inequality of any part of the European Union, and whether the Government are committed to addressing those inequalities with determination and sustained funding.

Amendment 8 challenges the Government to include in the Bill the missions so clearly set out in the White Paper. All my amendment does is repeat those missions. They are not perfect, and they are necessarily the ones Liberal Democrats would include. We would perhaps include something more specific on health inequalities and life expectancy, which is one of the missions, and we would include child poverty more specifically than do the ones on deprivation in the White Paper. However, those are the missions the Government have chosen and they will do a good job—if the Government keep to them, and to the metrics in the addendum to the levelling-up White Paper.

I accept the argument that the Minister gave last time, that missions change over time. Of course they do, and my amendment makes it clear that they will and that the Government should change them. However, that an entire Bill should fail to list what the missions are seems to me a failure of government ambition and determination. At the moment, the Government will set out their missions after the Bill has been enacted. Perhaps the Minister will be able tell us whether they will include all the elements in the White Paper.

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[Baroness Pinnock (LD)]

My Lords, we on these Benches welcome this group of government amendments, which are in response to the strong arguments made in Committee by the noble and learned Lords, Lord Hope of Craighead and Lord Thomas of Cwmgiedd.

It is astonishing that those who draft legislation continue to do so without recognising the implications of devolution. One would think that by now the lesson would have been learned. This is not the first time in this or other Bills that late-stage amendments to recognise the facts of devolution have had to be made. It would be good to hear the Minister confirm that in future the implications of devolution for draft legislation will be considered at an early stage, not at the last minute, but we welcome these changes that have been made.

[Baroness O’Neill of Bexley (Con)]

I remind the House that I am the leader of the London Borough of Bexley and therefore have associated connections with London Councils and the Local Government Association. As leader of the London Borough of Bexley, my experience of devolution in London has been under three different mayors. I am a firm believer in devolution, but it must always be to the lowest common denominator. That spend must be to address local issues and allow local government to be answerable to the electorate.

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[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.

--- Later in debate ---

Tackling disparities wherever they occur must surely be the fundamental part of levelling up. Too often, the levelling-up funding awards have been a bit of a blunt instrument which assume that, because one area has a level of deprivation different from another, the second area does not need any support at all in relation to levelling up. I beg to move.

[Baroness Pinnock (LD)]

My Lords, this group of amendments from the noble Baronesses, Lady Hayman of Ullock and Lady Taylor of Stevenage, concern the cost of living, based on regional variations that could exacerbate the challenges in the very areas already defined by the Government as suffering multiple inequalities. The noble Baroness, Lady Taylor, made a case for investigating geographical disparities in relation to the cost of living, which was the theme of my noble friend Lord Shipley’s amendment that was agreed earlier today.

The cost of living crisis is hitting some families and some parts of the country much harder than others. The Centre for Cities has done an investigation into the differences in the impact of the cost of living crisis on different parts of the country. What it discovered, which is not surprising, is that some areas of the north, the Midlands and the West Country are harder hit than cities in the south and the south-east. That mirrors the geographical inequalities we have been debating today.

I picked out these figures because they are from west Yorkshire. Bradford is already a significant area of child poverty and family deprivation. The Centre for Cities study, which has data from as recently as May this year, shows that on average a family household in Bradford is poorer by £111 a month. Huddersfield, in my own council area—a similar area for child poverty and deprivation—was also poorer by £111 per month. Every household in every part of the country will be worse off as a result of the cost of living crisis and all that goes with it. But when I looked at towns in more southern parts of the country, I found that they were worse off by, for example, £61 a month, £59 a month and £65 a month—about half the hit that families in Bradford and Huddersfield have had.

There is an issue here that I hope that the Government are thinking about in considering levelling up. The arguments we have heard in earlier debates demonstrate that areas with existing poverty and a further impact on family finances are harder hit than others where family finances are more resilient to a cost of living crisis. That leads me to conclude that those same areas should be the focus of the Government’s levelling up. It is no good saying, as the Government have done through the towns fund and the levelling-up funds, that Newark and bits of North Yorkshire are in need of levelling up. I am not denying that they would benefit from investment, but the places to which I am referring are multiply deprived and multiply under the hammer of the cost of living crisis, because of their earlier multiple deprivations.

If the Government are serious about levelling up, those are the places that need a laser focus of help, investment, planning and strategies to lift them out of the doldrums, so that they can experience the quality of life that more financially well-off areas experience. That is why this series of amendments is important. It underlines the fact that more financial troubles heap additional burdens on to these already deprived households. I look forward to seeing whether the Minister agrees with me. I live in hope.

[Baroness Scott of Bybrook (Con)]

My Lords, I am really pleased to address the important issue of the cost of living, dealt with in Amendments 19 and 274, proposed by the noble Baroness, Lady Hayman of Ullock. The Government absolutely understand that people are worried about the cost of living challenges ahead. That is why decisive action was taken at the Spring Budget this year to go further to protect struggling families. Taken together, support to households to help with higher bills is worth £94 billion, or £3,300 per household on average across 2022-23 and 2023-24. This is one of the largest packages in Europe.

His Majesty’s Government allocate cost of living support on the basis of the needs of cohorts, rather than location. We are committed to helping those who need it most, wherever they are. There are existing mechanisms in place to monitor and evaluate regional, economic and social disparities, and these mechanisms are effective and ongoing, making the amendment, I suggest, redundant.

The UK2070 Commission leads an independent inquiry into city and regional inequalities in the United Kingdom, while the Office for National Statistics routinely produces a range of datasets with a regional and local breakdown, including on inflation. This, alongside the Government’s spatial data unit, which is transforming the way the UK Government gather, store and manipulate subnational data, means that these amendments, we believe, are not necessary.

Amendments 20 and 285, also in the name of the noble Baroness, Lady Hayman of Ullock, seek to establish an independent board to assess geographical disparities in England, and would allow for its parameters to be specified by regulations. I have already been very clear that we are committed to enabling scrutiny of our progress on levelling up. Through my department’s spatial data unit, we are embracing and seeking to build on this engagement, including through work to improve the ways in which the Government collate and report on spending and outcomes and consider geographical disparities in our policy-making. As noble Lords will know from my responses to earlier groups in this debate, we have also established the independent Levelling Up Advisory Council, chaired by Andy Haldane, so we do not believe we need any further, unnecessary proliferation of public bodies in this space.

Amendment 22, in the name of the noble Baroness, Lady Taylor of Stevenage, considers the appropriate granularity of data. We agree with her that for certain missions and policy areas, this is extremely important. The spatial data unit in my department is already working closely with the Office for National Statistics to improve the granularity of place-specific data and strengthen published local statistics. For example, it published local neighbourhood area estimates of gross value added earlier this year, enabling comparisons of economic output to be made between very small geographical areas.

I hope I have convinced and reassured the noble Baroness, Lady Hayman of Ullock, and that she will not press her amendment and others will not press theirs.

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

My Lords, Amendment 24 in my name asks the Government to define by regulation exactly what they mean by levelling up. We have the 300-page tome of the levelling up White Paper—I see a number of them around the Chamber—but, for all its detailed analysis of some of the associated problems and complexities of regional disparities in the UK, nowhere does it produce a succinct definition of what success will look like.

The challenge is to turn “levelling up” from just another political slogan—no doubt with a political project behind it, like “Take back control” or “Stop the boats”—into a genuine economic and social project that will make a real difference to real lives. This is becoming increasingly important as the cost of living crisis has turned the dial again. Research shows that the so-called red wall seats are now worse off in terms of life expectancy, income ratios and other factors than they were before the concept of levelling up was introduced by the Conservative Government, and that the north/south divide has been widening because of the cost of living crisis.

The Institute for Government has expressed concerns that the levelling-up plans will fail. Commentary on the 12 missions describes five as lacking ambition, three as too ambitious to be realistic, four as failing to define what success looks like, two as having too narrow a focus, and the one on R&D spending as failing to line up with the overall policy objective. The very people expected to deliver levelling up—local government and its partners—remain confused about what it means and the people they represent do not see any improvement because disparities are getting worse.

Research undertaken for the Centre for Cities, which the noble Baroness, Lady Pinnock, mentioned earlier, showed that only around 43% of people thought they understood what levelling up means and that people living in former red wall seats are more likely to lack confidence in the Government’s ability to level up their area. Almost half—49%—said that they were not confident that their area will be levelled up, with just under 4% saying they were very confident in the Government’s plans. There is also an urban/rural divide on confidence in the levelling-up agenda, with a significantly higher proportion of people in rural areas lacking confidence that their area will be levelled up. We reflected some of that discussion earlier today.

Even the metrics in the White Paper are not clearly defined. The LSE says that they are neither exhaustive nor definitive and:

“Addressing key omissions and shortcomings and embedding a more granular approach to metrics and building up … data infrastructure will be essential”.


The trouble is that you cannot measure what you cannot define, so a clear definition is essential.

We are absolutely not asking the Government for a definition that takes us in the direction of each place being the same, because they are not. The power of devolution is that areas succeed on their own terms and in being able to capitalise on their unique economies, features, places and people in a way that is right for them. A significant example that is close at hand is Germany, where political will and investment have achieved the remarkable reunification of the east and west through a partnership of the local and the national, with common cause. We fear that, without a similar clear ambition and mission here, the drive of the Prime Minister and Chancellor for a new period of austerity will stop levelling up in its tracks. I beg to move.

[Baroness Pinnock (LD)]

My Lords, increasingly I think that we need a clear definition of levelling up, partly because what I have in mind is certainly not shared by many others around the Chamber.

When I read the tome—the levelling up White Paper—it struck me, with all the maps and graphics in there, that the aim the Government had in mind was to have a clear, strategic focus on areas of multiple deprivation, as defined in the tome, and others, including poor health, lower skills, poor housing, lack of economic opportunity and poor transport, as the White Paper lists. I read it to mean that because some places had several of those factors, they were the places that the Government were going to focus their attention on as a strategy over a number of years.

I have cited previously what the White Paper says about the fact that long and deep-seated change is needed. I support that, if I have it right. What I do not think it means is that every small pocket of poverty can be addressed through levelling up, because even in the wealthiest places there are pockets of poverty. If we tried to do that, it would dissipate the clearer strategy. I am beginning to think that I am the only person who thinks that.

That was the sort of strategy that was labelled City Challenge, Single Regeneration Budget 1, Single Regeneration Budget 2 and the Neighbourhood Renewal Fund. That was the strategy: pick out those places that were suffering multiple deprivation, put a plan together and make a big investment to see whether that would make a difference. Sometimes it did, but sometimes those places did not really improve—perhaps because the strategy was more about places and not about people. People need to be at the heart of any levelling up. Levelling up includes hard stuff, such as skills, employment opportunities, decent housing, health, and child poverty. It is difficult and long-term, and you do not see immediate results. That is what I think levelling up is, and I am not sure —having sat through long hours of debate on the subject—whether I am the only person who thinks that.

A couple of years ago, the Centre for Cities described what it thinks levelling up means. First, it suggested that it should include increasing standards of living across the country:

“There is no inherent reason why one part of the country should have poorer skills or lower life expectancy than another”—


I can go with that. Secondly, it spoke about helping

“every place reach its ‘productivity potential’”;

that is, the gap between its level of economic achievement and what it should be. For example, in parts of Yorkshire, there is quite a big gap, and that will be the same elsewhere.

We need to hear what the Government think levelling up is and where it is aimed. Is it what is in the White Paper, or is it, “Oh dear, we have to try to deal with pockets of poverty and deprivation everywhere”? That is a different strategy, in my head. Unless there is clarity about what the purpose of levelling up is, I think the strategy will become so broad and wide that lots of areas and lots of our communities will miss out. I certainly would not like that.

I guess the noble Earl has the short straw with this group; I really look forward to hearing what he has to say.

[Earl Howe (Con)]

My Lords, Amendment 24, in the name of the noble Baroness, Lady Taylor of Stevenage, asks the Government to define levelling up. I can simply say that it is already very clearly defined. When launching the levelling up White Paper, the Government clearly defined levelling up as

“a moral, social and economic programme for the whole of government”

to

“spread opportunity more equally across the”

country.

As stated expressly in the very first pages of the White Paper and thereafter, levelling up is about, first, boosting pay and productivity, especially in places where they are lacking; secondly, spreading opportunities and improving public services, especially where they are weakest; thirdly, restoring local pride; and, fourthly, empowering local leaders. Those are the principal four headings—not so different from those articulated by the noble Baroness, Lady Pinnock, actually—and in the very first clause of the Bill, levelling-up missions are defined as

“objectives which His Majesty’s Government intends to pursue to reduce geographical disparities in the United Kingdom”.

Furthermore, the Bill will already place a statutory duty on the Government to confirm their missions through laying and publishing a statement of levelling-up missions. There is no need, therefore, to have regulations on top of that.

The Government are putting the framework for the missions into statute, and that arrangement is designed to ensure that what we mean by levelling up and how well we are doing to make progress are transparent and the Government can be held properly to account. As the Government have consistently set out, the first levelling-up statement will be based on the White Paper, but missions, as we have said a number of times, need to evolve over time. The Bill requires the Government to notify Parliament formally of any proposed changes to the missions or metrics set out in the statement of levelling-up missions, and we fully expect that Parliament, expert stakeholders and, indeed, the wider public will use these provisions to hold the Government to account—which, I take it, is in fact the main point behind the amendment.

I hope that my explaining this on the record will have reassured the noble Baroness, Lady Taylor, and that, in the light of what I have said, she will feel able to withdraw her amendment.

--- Later in debate ---

[Baroness Pinnock (LD)]

My Lords—

[Baroness Scott of Bybrook (Con)]

May I answer the noble Lord first? I am not talking about the West Midlands or Warwickshire; I am talking about what is in the Bill and why we are doing what we are doing. I will come on to the Warwickshire issue in a bit, but this has nothing to do with it as far as I am concerned. What I am saying now is about the Bill and not about Warwickshire.

[Baroness Pinnock (LD)]

I thank the Minister for giving way. Do the Government have any limit for the expansion of mayoral combined authorities? If Warwickshire is allowed to accede to the West Midlands —Worcestershire is nearby and Staffordshire is next door. What is on the other side? I am thinking of between Coventry and Birmingham. It could get very large, so I want to know if there is a limit. This is a serious question, because when the West Yorkshire Combined Authority was created, we were not permitted to include parts of North Yorkshire, which had always been part of that combined authority before it had mayoral status. This is an interesting question for me in West Yorkshire, as well as for those who live in the West Midlands area.

[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.

Non-Domestic Rating Bill

Baroness Pinnock Excerpts

Committee stage
Monday 3rd July 2023 Grand Committee

I also noted in the helpful briefing provided by the Chartered Institute of Taxation that it is asking why the new relief for improvements will not be introduced until 2024. Its concern is that leaving it until then will incentivise a delay in undertaking improvements. I will be interested in the Minister’s response on that.

[Baroness Pinnock (LD)]

My Lords, at the outset of the debate I remind the Committee that I have relevant interests as a councillor and as a vice-president of the Local Government Association.

This group of amendments is significant because it focuses our attention on energy efficiency and on how the business rates system could be adjusted to encourage more businesses to improve the energy efficiency of their premises. Amendment 1, in the name of the noble Lord, Lord Ravensdale, is important in that regard. As he said, an earlier Bill on non-domestic rating focused on relief for energy generation and storage, but not energy efficiency. Energy efficiency is the non-glamorous side of getting to net zero. It is about improving the general energy efficiency of buildings through loft and cavity wall insulation, putting in more efficient heating systems and so on.

I have a high regard for Amendment 1 for the reason that the noble Lord outlined, which is that the payback period for energy-efficiency improvements can be very long. Therefore, giving just one year’s relief is a drop in the ocean. If we want to encourage businesses to make these improvements and to invest in their property by improving their energy efficiency, there must be relief on business rates. This is a positive amendment and, if the noble Lord, Lord Ravensdale, wants to pursue it on Report, I am sure that we will give it positive consideration.

The other amendments in this group, in the name of the noble Earl, Lord Lytton, suggest five years of relief. That is another way forward. I think that we will have to debate five years of relief or unlimited relief. If we are really concerned about getting to net zero, there has to be a real incentive to do so.

I co-signed Amendment 5, in the name of the noble Baroness, Lady Hayman of Ullock, about heat networks because I thought that it was important in itself. The Government have a scheme—the heat network efficiency scheme—which gives grant funding to communal heat networks or district heating schemes. This amendment matches well with that. If the Government are giving with the one hand but taking with the other, that seems a negative approach to encouraging heat network schemes. That is why I very much support Amendment 5 in particular.

Maybe when we get to Report the amendment will not say “2050” but will be unlimited, matching the other amendments in this group, which are making a positive push towards getting businesses, via the relief through the business rates system, to become more energy efficient. These are all good, probing amendments. I know that the Minister is supportive of energy-efficiency schemes and moving towards net zero, so I look forward to her positive response to this group of amendments.

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

My Lords, I start by welcoming our new Deputy Chairman of Committees on his first outing today. I think that I am allowed to say that—anyway, I have said it.

These amendments from the noble Lord, Lord Ravensdale, the noble Earl, Lord Lytton, the noble and learned Lord, Lord Etherton, and the noble Baronesses, Lady Hayman and Lady Pinnock, concern the two new business rate reliefs introduced by the Bill: the new improvement relief and a relief for low-carbon heat networks.

First, on the improvement relief, during the review of business rates a key ask from ratepayers was support for those businesses looking to improve their property. Clause 1 delivers on that ask by introducing the improvement relief. The noble Earl, Lord Lytton, asked about the definitions of “improvement” and “relief”. These definitions are in the draft regulations, on which we are consulting. We will consider those matters following consultation.

Clause 1 will ensure that from 1 April 2024 no business will face higher business rates bills as a result of qualifying improvements it makes to a property it occupies, in the 12 months following those improvements. When a ratepayer makes improvements to the rateable part of their property, that is likely to increase its rateable value and, therefore, the rates bill. To deliver the relief, Clause 1 will ensure that, where that happens and the qualifying conditions for improvement relief have been met, that increase in the rateable value will be delayed for 12 months. Clause 3 does the same for the central rating list.

As is common for business rate reliefs, the detailed rules will be in regulations made under the powers in these clauses. My department has published those regulations in draft so that the House may see during the passage of the Bill how we intend to use these powers.

The amendments we are considering in relation to improvement relief, from the noble Lord, Lord Ravensdale, the noble Earl, Lord Lytton, and the noble and learned Lord, Lord Etherton, seek to extend the period of relief from one year to five years and to allow unlimited relief for energy-efficiency improvements.

Of course, I understand the concerns we have heard and why some consider that the relief should be extended. It is a question we face when we come to consider and review all the reliefs in the business rates system. We recognise the importance of energy-efficiency improvements to properties. We have already ensured that eligible plant and machinery used in onsite renewable energy generation and storage, such as rooftop solar panels, wind turbines and battery storage, are exempt from business rates from 1 April 2022 until 31 March 2035. Onsite storage used with electric vehicle charging points is also exempt. We have done this using existing powers.

However, as with all tax breaks, we must balance the need for support with the need to fund the vital public services that those taxes support. In the case of improvement relief, we considered these matters at length during our review and, following extensive engagement with business groups, settled on a 12-month relief.

Under the current system, as one would expect for a tax based on the value of property, businesses may see an immediate increase in their rates bill for improvements they make to their property, where those improvements increase the value of the property, but they may see a lag in the return or income that flows from that investment.

--- Later in debate ---

Moved by

[Baroness Pinnock]

7: Clause 5, page 16, line 4, leave out “third” and insert “second”
Member’s explanatory statement
This amendment would require central non-domestic rating lists to be compiled every two years.

[Baroness Pinnock (LD)]

My Lords, my noble friend Lord Shipley and I have Amendments 7, 9 and 11 in this group, all of which seek to achieve the same end; namely, that the revaluation period be reduced to two years. The Minister and the Bill team have been very generous with their time and that has enabled a discussion of the time gap between revaluations. The Government have decided on a three-year gap. We are suggesting that a shorter gap may enable a valuation that more closely reflects business confidence and thus rental values.

There is a revaluation this year, which will be based on rental values in 2021. Under the Government’s proposal, the next revaluation will be in 2026 and based, therefore, on rental values in 2024. In the Government’s own business rate review of 2020, respondents wanted a shorter gap between the assessment of revaluations and implementation. Hence the amendments to Clause 5, which reduce the three-year gap to two years, as this will result in a closer alignment between business confidence and the revaluation. Businesses, as we are all very aware, are facing considerable challenges as a result of factors well outside their control. The significant fluctuation in economic outlook, reflected, for instance, in the level of inflation and the rise in interest rates, creates uncertainty for businesses. A narrower gap between revaluations is one step that will help businesses.

In our discussions with the Minister, it became clear that there are no administrative barriers to a two-year gap. Indeed, the Netherlands has for many years managed a similar system with annual revaluations. Other amendments in this group are designed to achieve the same outcome and come from noble Lords who have considerable experience in these matters. The noble Earl, Lord Lytton, the noble and learned Lord, Lord Etherton, and the noble Lord, Lord Thurlow, all have considerable expertise and knowledge in practice and have picked up the same issue of the period between revaluations.

It seems to me, an amateur in these things, having read the reports from businesses asking for a shorter period between revaluations, that the Government should go back and go for two-yearly revaluations. It would be better for everybody. If we have, as the Government say they have, a priority to support businesses and give them greater certainty and confidence in the system, I am sure the Minister will again respond positively to this set of amendments. I beg to move.

--- Later in debate ---

[The Earl of Lytton (CB)]

I am delighted about what the Minister has just said. I thank her for that and apologise for making her say it twice, if I did. It is my understanding that this is now a permanent abolition of downward relief, which is extremely welcome.

[Baroness Pinnock (LD)]

My Lords, I thank the Minister for her response. As she rightly said, this is at the heart of the changes being introduced in the Bill. I thank her for recognising that there could indeed be a further review to reduce the gap between revaluations. However, although I may have misheard her, I thought that the Minister said that the review conducted by the Treasury was—

--- Later in debate ---

[Baroness Pinnock (LD)]

I shall try to pick up from where I left off. I may or may not have heard the Minister aright so this is just to check. The very good Library briefing on the Bill references the Treasury review into business rates. I shall refer to the Library briefing, then the Minister can say whether or not I have misunderstood. It says:

“On the longer-term proposals, most respondents stated that … revaluations should happen more often”—


we agree with that. But then it says that

“the gap between when the revaluations were assessed and when they came into force should be shorter than the current two years”,

which was one of the points that I was trying to make.

I may have misheard the Minister—if I have, I apologise—but the point that the review was making was to say yes to a shorter gap than five years, and the Government have pitched on to three. At the same time, the assessment year should be shorter than the two years that it currently is—that is what I think the review was saying, and I was trying to say that part of the argument for reducing the gap between the assessment year and the revaluation year is to make it narrower.

[Baroness Scott of Bybrook (Con)]

The response was three years, because of the reasons that I put forward—but, yes, we have aspirations to squeeze that to two years. That is the issue that we are discussing, and it is absolutely right that we are trying to do that. It is where we would like to get to, but it will take the changes that we are making to the Valuation Office Agency to do that—and then there is the digital aspect, and things like that, which we have already talked about.

[Baroness Pinnock (LD)]

I beg leave to withdraw the amendment.

Amendment 7 withdrawn.

--- Later in debate ---

I trust that I have addressed the many points raised by noble Lords, and I am grateful for the engagement we have had previously on the issues. I ask the noble Lord to withdraw his amendment.

[Baroness Pinnock (LD)]

I think that I have listened very carefully but, on the digitisation of business rates, which I support, did the Minister explain the arrangements that could be made for businesses in remote locations where there is little or no mobile signal and where broadband has yet to reach them, despite what I accept are the Government’s best intentions that that should be the case? I live in the upper Pennines region, where there are businesses and remote farming communities. So far, they do not have either. Ditto in the Yorkshire Dales; I know of businesses there with neither a mobile signal—one that works, anyway—or a broadband connection. What arrangements will be made for such businesses?

[Baroness Scott of Bybrook (Con)]

I am told that there will be a non-digital availability. I will get all the details for the noble Baroness and I will write a letter, which will also go to the Library.

--- Later in debate ---

[The Earl of Lytton (CB)]

My Lords, I was making the point that it should be a defence for a business rate payer to say that they had reasonably relied on published VOA or other guidance in respect of anything to do with being made liable for a penalty. Failure by a ratepayer to notify carries with it a number of penalties, at least one of which is entirely open-ended—more of that in a minute. The implementation of this will depend very much on the extent and quality of the guidance issued, especially as it is supposed that this will be comprehensible to unrepresented ratepayers. I particularly make that point because we are trying to make sure that this does not trigger a requirement across the board for more ratepayers to seek professional advice.

I appreciate that the VOA will not bring in notification and penalty measures until it is satisfied that they work smoothly and seamlessly. That is my understanding—my words, I stress, not necessarily the ones that the Minister would use. My submission is that no government body should be at liberty to state one thing in guidance and then do something quite different or to reinterpret established understandings at its own whim and caprice to the detriment, in this instance, of a ratepayer.

I shall deal with Amendments 23 to 26 as a job lot because their purpose is to fix a number of issues that appear to me to be typos or errors of construction or perception to do with the way in which the penalty regime will work. First, the fixed penalty minimums for incorrect information provided to the VOA appear to be the wrong way round and Amendments 23 and 24 serve to remedy that. I think the figures have just been transposed.

Secondly, unlike the penalties in relation to the provision of information to HMRC as opposed to the VOA, there is no cap whatever for non-compliance on the VOA notification. This seems contrary to legal principle in general and at odds with non-compliance with, for instance, the form of return under Schedule 9 to the 1988 Act, which is subject to a cap, so Amendment 25 seeks to address that.

Finally, there is the question of the Valuation Tribunal for England’s—VTE’s—determination of penalties, which the VOA has imposed in lieu of prosecution for false information. As drafted in the Bill, the burden of criminal proof is inverted, with the ratepayer having to prove “beyond reasonable doubt” that they did not commit the offence. That cannot be right or reasonable. I suspect that it is not intended, either—I hope I am correct. Amendment 26 seeks to deal with that.

That summarises my amendments in this group. I beg to move.

[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.

--- Later in debate ---

I will be brief because it would be nice to finish, although a vote is coming. We very much support Amendment 31 in the name of the noble Lord, Lord Shipley. The hospitality sector has clearly laid out its particular concerns about how it may not come off so well from the improvement relief, the material changes to circumstances and the duty to notify. I am sure that the noble Lord, Lord Shipley, will mention them, so I beg to move.

[Baroness Pinnock (LD)]

My Lords, Amendments 30, 32 and 35 are in my name—

--- Later in debate ---

[Baroness Pinnock (LD)]

My Lords, Amendments 30, 32 and 35 are in my name in this group. They cover two issues. One is reform and the other is review. The reform amendment is Amendment 30 because, as many of us said at Second Reading, we are tinkering at the edges of business rate reform and change. What is needed is, in fact, what the Conservative manifesto promised in 2019—a fundamental review of the system. Amendment 30 asks for a review and reform of the non-domestic rateable value system between different parts of the retail sector. It focuses particularly on the retail sector.

In Amendment 30, paragraphs (a), (b) and (c) of proposed new subsection (3) identify the different sectors: single-shop businesses in high streets,

“chain stores with multiple premises in city centres and out-of-centre shopping malls”

and “mainly online operations” by global businesses, which do not pay their fair share of taxation in any case and seem to be taxed very lightly in business rates compared to the sectors mentioned in proposed new paragraphs (a) and (b).

I would like the Government to agree to the amendment, as they already recognise that the system is not fair and equitable. For example, the current system acknowledges that small businesses are overtaxed by the existing system of assessment and responds to that by creating a plethora of business rate reliefs, such as small business rate relief, charitable relief and so on. The Treasury funds those reliefs, but how much better would it be if the system was designed from the outset to be more equitable between different parts of the retail sector? It would encourage more activity on our high streets, which benefits local businesses and the communities that they serve, and would also extract more money from those who have most and who have avoided taxation the best—global online retail businesses.

At this point I shall say, for brevity, that Amendment 36 in the name of the noble Lord, Lord Thurlow, is an excellent expression of what I have just tried to achieve with my Amendment 30, so I obviously totally support that and look forward to the noble Lord describing exactly how it will be achieved.

Social Housing (Regulation) Bill [HL]

Baroness Pinnock Excerpts

Consideration of Commons amendments
Tuesday 27th June 2023 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as co-chair of Peers for the Planet and in that I have a family member currently working in the field of energy efficiency. I will respond to the Government’s Motion to agree with the Commons in its Amendment 16. It removes Clause 24, on energy efficiency, which was inserted with cross-party support on Report. Our amendment sought to ensure a comprehensive approach to energy efficiency for tenants in social housing, to reduce their costs and to improve living conditions. It would also have cut the costs to government—and the taxpayer—of subsidising energy bills and helped with energy security and achieving the Government’s target of reducing energy demand by 15% by 2030.

The importance of energy efficiency has been highlighted by numerous committees and reports from this and the other place, including one recently from the Public Accounts Committee which highlighted the problems so far with energy efficiency schemes, including the lack of coherence. It said they had been “fragmented” and that

“stop-go activity has hindered stable long-term progress towards government’s energy efficiency ambitions.”

It is important that real progress has been made during the passage of this Bill. We should remember that, at an earlier stage, energy efficiency was added to the objectives of the Regulator of Social Housing, with the support of the Government. I pay tribute to the work of the noble Baroness, Lady Pinnock, in achieving that end.

The Minister and her officials have been generous with their time in discussions prior to today’s proceedings —I am very grateful for that—in which she stressed the centrality of consultation with the sector before imposing standards. We have made progress, as she said, with a commitment to publish a consultation within six months of Royal Assent. As the Minister has heard me say before, in the past, the Government have been rather better on publishing consultations than responding to them, and much better than on actioning the policy that was their original subject. Can she give any further reassurances about timelines for a government response to the consultation and the provision of a final plan to improve the energy efficiency of social housing within 12 months of Royal Assent?

While we have not made as much progress as I would have wished on this issue, we all understand that the priority of the Bill has been the urgent need for effective regulation of social housing, and I completely recognise any concerns about diverting from that central objective. I also recognise that energy efficiency is an issue not just for the social housing sector but across the whole of our housing stock. It arises mainly from the quality, or lack thereof, of that housing stock. As the Minister knows, I have tabled amendments to both the levelling-up Bill and the Energy Bill to try to address what we are talking about in this Bill: the need for a long-term strategic plan of action which would include but not be exclusive to the social housing sector.

This is an issue to which we will return, but I hope the Minister can give me some reassurance on the issues I have raised when she sums up.

[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.

Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023

Baroness Pinnock Excerpts

Tuesday 20th June 2023 Grand Committee

[Lord Naseby (Con)]

My Lords, I had finished two of the three key features I wanted to address, which were eligibility and obligations. I now turn to probably the most important of the lot: sanctions. As I understand it, failure to join the RAS means exclusion from the planning and building control systems. In effect, that means exclusion from most commercial and residential development in England for all companies, including non-developer companies—for example, an engineering subsidiary wanting to expand.

These sanctions are automatic. The regulations remove discretion in their use from the Secretary of State. The underlying Act originally contemplated the availability of discretion, but somehow it does not appear to have been carried through to the regulations. There are no mechanisms to determine whether the sanctions are proportionate to the risk or the harm. These coercive penalties would also apply to any further membership conditions applied in future, including compulsory financial contributions for works to buildings to which the scheme member had no connection at all.

I conclude with my reading of the situation. The severity of the penalties and the sanctions, the lack of discretion in their application, the arbitrary nature of inclusion in the scheme and the effect on employees, subcontractors, other stakeholders and shareholders seem to me, and to others outside who I have talked to, to be disproportionate and suggest that—I hope—His Majesty’s Government will think again. This industry is absolutely vital to this country; we see that daily in the newspapers.

My noble friend mentioned the material suppliers. In many ways, to any of us who take a real interest in this, they are equally liable. After all, without rotten materials that were highly inflammable, we probably would not have had Grenfell. I am surprised that, if I understand what my noble friend said, so far no single firm in that field has contributed anything or is proposing to join the scheme and contribute.

The other area that my noble friend did not cover was overseas developers. A fair number of projects was undertaken by overseas developers. We have a diplomatic corps in these countries. I hope that our ambassadors or high commissioners in the relevant countries have been given the information to pursue these developers. They should be looked upon just as firmly as are our developers. If they do not wish to contribute at all, frankly, in my judgment they should be barred from working in the United Kingdom in future.

[Baroness Pinnock (LD)]

My Lords, it is seven years since the Grenfell Tower fire that killed 72 people and devastated the lives of countless others. We owe it to them, and to all those still living in buildings deemed to be unsafe, to find a route to full remediation that excludes innocent tenants and innocent leaseholders from any of the costs.

As the Minister stated, the Building Safety Act included the measures that the Government intended to take to enforce the cost of remediation on those who developed the buildings. They should also have included a route to impose the costs of remediation on those who used the flammable cladding. I know that the Minister referenced this but to date, seven years on, the Government have not been able to find a route to force the three substantial manufacturers that the Minister named to accept responsibility and accept that they ought to pay towards the costs of remediation.

Then there are the construction companies that omitted fire breaks, relied on false material-testing outcomes and relied on building inspectors contracted by the very same construction company. We Liberal Democrats have said from the very beginning, seven years ago, that whatever legislation is passed to put these wrongs right, leaseholders must not pay a penny.

Through the Building Safety Act and this statutory instrument, the Government have focused entirely on the developers. Of course, that is right, but there are government responsibilities here as well. I am talking about all Governments, not necessarily this one. Thirty years ago, those who privatised the Building Research Establishment and the British Board of Agrément enabled building control inspectors to become independent of the local planning authority. All these policy decisions played a part in enabling the Grenfell disaster. I say that because that has been said in the Grenfell Tower inquiry.

No doubt, when the inquiry publishes its findings, hopefully sometime this year, it will expose these facts and attribute relative responsibilities. Meanwhile, these regulations are draconian; in many cases rightly so. However, there are inevitably some unforeseen consequences. The first of these relates to developers that are brought into the scheme and discover that, following intrusive building inspections, their developments need no further action. The noble Lord, Lord Naseby, and I have obviously had access to the same lobbying material from those in the industry who are concerned about some aspects of these regulations.

The principle is sound; the implementation is leading to some circumstances in which those who are not responsible will be required to fund remediation for which they have no part to play. The issues arise, first, from the criteria the Government have set. As the noble Lord, Lord Naseby, pointed to, these are around profitability—so those developers that were unprofitable but nevertheless built these faulty and dangerous buildings are excluded. I am sure the Government did not intend that to be the case, so I hope the Minister will point to the way in which that will not happen. It does not seem right at all, because we know how companies can evade some of the requirements put on them.

The next area has again been raised by the noble Lord, Lord Naseby, but I want to emphasise some of it. I remember the debates on the Building Safety Act. Initially, it was all about trying to ensure that only those developers and construction companies, and those who knowingly supplied flammable cladding—I am still waiting for that bit; I say “knowingly” as it is in the evidence of the Grenfell Tower inquiry—would be made liable for the remediation cost. That is fair and is absolutely the right thing to do. Those who did these things knowingly must be made to pay for them, but not those who did not. Unfortunately, the great scoop of these regulations will pull in some companies and developers that built blocks of flats of over 11 metres but kept to the rules that existed at the time. That does not seem right.

Another issue with these regulations—I am sure that the Minister will recognise this as an unforeseen outcome of them—is that I could see no way by which developers, once they join the scheme and then assess their buildings, at a considerable cost, are able to leave the scheme if they find that there is no action to be taken. This issue was in the lobbying material as well. Perhaps the Minister will either give me an assurance that they can or point me to where it says that they can leave, because that would be helpful.

There is another issue with these regulations, which are very extensive. Many developers are part of a wider family of companies, some of which will have had no part to play in development. That family of companies is being brought into the scheme and could be sanctioned, even if it is a company that has nothing to do with development. That does not seem right either, and I am sure the Government did not want it to happen. It would be foolish, but the sanctions are automatic.

This is all about the unforeseen outcomes of some draconian regulations, which I support. But we have to try to find a way in which good players are able to escape the scheme, and the sanctions and obligations that are part of it.

I will now raise the consequential impact of these regulations on local planning authorities. I remind the Committee that I am a councillor and a vice-president of the Local Government Association. I notice that there is an impact assessment, and calculations have been made of additional costs, but I am not sure that it has taken into account the differential impacts on local planning authorities across the country. The regulations will have very little impact on some, and a major impact on others. For those on which there will be a major impact, there will be expectations of additional members of staff, either in building inspection or as local planners. That does not seem to have been raised in the impact assessment as a calculation of costs to local planning authorities. I know the Minister agrees with the “new burdens” philosophy—the agreement that any new burdens that the Government impose will be met in full—so will the costs be met in full and, importantly, over the lifetime of these regulations?

Secondly, in her opening remarks—for which I thank her—the Minister emphasised social housing remediation a couple of times. Can she remind us where the costs for essential remediation of social housing—either local authority housing or social housing providers—will come from?

My next point is about the end date for the regulations. It seems that they are designed to respond to a specific set of issues so, once all the remediation work has been done, will the regulations cease? I could not find a sunset clause; should there be one? Otherwise, we will have sets of regulations that are no longer relevant.

Finally, I remind the Minister that these regulations address the safety issues facing only those who live in buildings that are more than 11 metres high. She will know what I am about to say, because I feel very strongly about it: those living in blocks that are 11 metres or lower are being forgotten. The leaseholders who live there still face extortionate insurance costs, for example, and many are still trapped in their flats, unable to sell. My big ask of the Minister is this: will she agree to meet those of us in the House who are concerned about this situation to discuss it and see whether we can find a way forward? It is not going away. The Government have tried; I am not pointing fingers. It is just that this is where we are, and we have to try to find a solution.

In conclusion, I totally support these regulations, with the caveats that I have explained. I want them to succeed, but I want the Minister and the Government to think about the unconsidered consequences. I look forward to what she has to say in response.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I draw attention to my interests in the register as a councillor at both district and county level and as a vice-president of the District Councils’ Network, though not the LGA—yet.

I thank the Minister for introducing the regulations, which we welcome. I am sure all noble Lords want every possible step taken to support leaseholders and to speed up the remediation of these unsafe buildings. Perhaps it is my inexperience in this House, but would it not be more appropriate for legislation with 43 clauses to be considered properly, as a Bill, rather than as regulations? We understand how urgent this is, so if the Minister has done it as a matter of expediency, perhaps she could confirm that it could not have been achieved in another way, allowing full scrutiny of all the issues raised by noble Lords this afternoon.

--- Later in debate ---

[Baroness Pinnock (LD)]

Oh yes, it is six years.

[Baroness Taylor of Stevenage (Lab)]

It is unfortunate that we are only now starting to make some progress on the essential remediation works that will allow leaseholders to sleep easily in their beds and begin to get their financial plans and aspirations back on track. I appreciate that some well-intentioned developers have done work in the meantime, but the regulatory framework supporting it is only now coming into play.

I pay tribute to the tireless campaigning groups, both those directly associated with Grenfell and others such as the Cladiators group in my area, driven by Sophie Bichener. I know the Minister is very familiar with Sophie’s case so I will not reiterate all the details, but the firebreaks referred to by the noble Baroness, Lady Pinnock, are a good example of non-cladding-related building fire safety jeopardy. Without these campaigns, we would almost certainly be no nearer having this leaseholder limbo resolved.

The fact that 48 developers have now signed up to the remediation contract is a significant step forward; there is no doubt about that. However, signing up is one thing and action is another. We hope that things will start to move much more quickly now. What steps is the department taking to ensure that developers move as quickly as possible on the remediation steps, and how will it monitor, challenge and enforce where appropriate?

We hope that the reports of full risk assessments by major developers to determine which defects need resolution and which do not are not simply a further device to delay essential works. Can the Minister tell us whether any deadlines are being set for all such risk assessments to be completed?

We would also like some reassurance about how leaseholders will be kept informed and updated on progress. Does this responsibility fall on the developers? If so, how will the department ensure that it has been carried out?

In his Statement on 14 March 2023, the Secretary of State rightly said:

“Those who are responsible must pay”.—[Official Report, Commons, 14/3/23; col. 727.]


While we welcome the fact that 48 builders have already signed up, it is extremely disappointing that some have still refused to do so. We are aware that the Secretary of State has rightly been very robust in his language in trying to bring builders that have not yet signed the contracts into line with those that have. We absolutely support this robust approach and hope that it is successful. If not, as the Secretary of State has clearly stated, such developers will be prohibited from further development. We have heard more about that this afternoon.

It would be helpful to know how such a ban will be enforced. The Minister has set out some further information relating to the enforcement process but it would be helpful to know how it will work. Is it to be done by the department or will it be a new burden on local government—as referred to by the noble Baroness, Lady Pinnock—and will that new burden be fully funded?

We welcome any action to address the building safety crisis, but the remediation contract and responsible actors scheme are still only a partial fix to the problem—in part, owing to the more limited scope of the definition of a relevant defect used in the remediation contract—compared to the Building Safety Act. Signing the contract will not obligate developers to fix all life-critical fire safety defects as defined by the Building Safety Act 2022. The Government acknowledge this in the Explanatory Memorandum, where they state:

“The developer self-remediation approach, and the RAS, is to be expanded over time to cover other developers who developed or refurbished defective 11m+ residential buildings and should pay to fix them”.


Is it intended to extend the contract in future to cover all life-critical fire safety defects? We also have a particular concern regarding the number of buildings covered by the contract. The department itself estimates that only 1,500 buildings will be remediated as a result of the contract, whereas credible estimates put the total number in need of remediation at around 10,000.

The Secondary Legislation Scrutiny Committee comments that

“between 6,220 and 8,890 mid-rise (11 to 18 metres) residential buildings required work to alleviate life-critical fire safety risks due to external wall systems”.

How does the Minister envisage this being resolved and what is the timescale? How many of the outstanding buildings beyond the 1,500 are the responsibility of those developers that have refused to sign the contract?

Meanwhile, ACM cladding remains on faulty high-rise buildings, with remediation not having even started on 22 of them. The building safety fund for remediation of non-ACM cladding and other fire safety defects on high-rise buildings is proceeding at a glacial pace, with just 37 buildings having completed remediation out of the 1,225 applications for funding. The building safety fund for non-ACM high-rise remediation was rated as red in the Infrastructure and Projects Authority annual report for 2022, falling from amber the year before, meaning, to quote the report:

“Successful delivery of the project appears to be unachievable. There are major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable. The project may need re-scoping and/or its overall viability reassessed”.


Many leaseholders in unsafe buildings waited patiently for years for building safety fund applications to be processed by the department, only to see them terminated. What guarantees are there that any building covered by the contract will not face additional delays to remediation work? Although we welcome the further action proposed in the regulations, some questions remain outstanding. How will leaseholders in buildings with defects outside the scope of the contract get them remediated?

With reference to developer obligations to identify, assess and remediate unsafe buildings, the contract stipulates that they must be carried out “as soon as reasonably practicable”. What assurances can be given to affected leaseholders of their ability to enforce this to ensure that developers are acting within a reasonable timeframe? What is the point of contact in the department and what powers will be used to support them? Why are buildings that are part of national infrastructure exempt? Surely, people working in or living close to such buildings should expect at least as great a level of protection, if not more.

I note the Minister’s comments about prohibited persons, but it is difficult to see how the use of new entities will not avoid those prohibitions and, without sanctions on that, where is the incentive not to do so? Can the Minister explain how new developers will be brought into the regulatory framework?

The Minister raised the critical issue of construction products. Will we receive further regulations on this? It seems they may be necessary. There was a Question today in your Lordships’ House on the manufacturers of construction products used in schools. Surely the manufacturers of construction products must be responsible for adequate safety testing of materials they produce.

I agree with the noble Baroness, Lady Pinnock, about work for remediation of buildings under 11 metres. What assessment has been done by the department of the extent of those issues in lower-rise buildings?

To reiterate, we welcome the additional regulations and encourage the Minister and the Secretary of State to be as robust as is necessary to bring these long-drawn-out issues to a stage of remediation and resolution. We hope that the department will use every power it has to deal with those who are not looking to do the right thing and live up to their responsibilities. The leaseholders in these buildings have been faced with a living nightmare. We owe it to them to get these issues resolved without any further delay.

Non-Domestic Rating Bill

Baroness Pinnock Excerpts

2nd reading
Monday 19th June 2023 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I remind the House of my relevant interests as a councillor and as a vice-president of the Local Government Association.

This Bill is one in a long line of recent Bills making important amendments to business rates. I reckon that, for at least 35 years, there has been no fundamental reform of the non-domestic rating system, whereas business practice, as we have been hearing, latterly from the noble Lord, Lord Thurlow, has been revolutionised by the growth of online retailers.

The Minister stated in opening that the Government are focused on longer-term reform, but being focused on longer-term reform is not the same as implementing it. All noble Lords who have spoken so far have brought the Minister’s attention to the fact that online retailers are benefiting at the expense of our high streets, despite the fact that the levelling-up Bill is trying to remedy that. Here is an opportunity to do something about it, and it has been missed.

The current system creates fundamental inequalities. Out-of-town online retailers pay significantly less than high street retailers because of the way business rates are worked out. Many times in this House I have given the example of a famous online retailer in a town near me. It pays £45 per square metre in business rates, whereas a small shop in my own local market town pays £250 per square metre. That is the extent of the inequality. It is one of the reasons high streets are finding it difficult to continue. That is why 47 shops a day are closing. The Government have a responsibility to address this relative decline of our high streets by creating a level playing field for our town centre retailers.

Having said that, this Bill introduces some improvements to the system. We on these Benches welcome Clause 5, which introduces the shortening of the period between valuations from five years to three years. This will help the rating system to respond in a more timely way to changes in economic circumstances. My noble friend Lord Shipley and the noble and learned Lord, Lord Etherton, have asked the question: why every three years? Why not every two years or even annually so that there is greater sensitivity to changes for businesses?

In their review of non-domestic rates, the Government stated:

“Annual revaluations would provide for the fastest updating of values, ensuring a highly responsive and up-to-date system, and this would mean tax liabilities would be closely reflective of economic conditions, economy wide or localised economic slowdowns would more quickly feed through into lower rateable values”.


That was posed by the Government, and we agree. Yet, in this Bill, they are failing to implement that very same thing. I hope the Minister can explain that for us.

Clause 1 makes changes to unoccupied hereditaments. This is a complicated part of the Bill. Can the Minister confirm that this will mean the continuation of the three months’ total relief from business rates for a property that is unoccupied? It seems that the proposal in the Bill is for an option for small business rates to be levied, as opposed to the standard business rates, after the three months. Can the Minister explain how this will encourage owners of empty high street shops, for instance, to relet or find a new use? It is almost the opposite to the way the council tax levy is used to encourage domestic properties back into use as homes. It will be interesting to hear what the Minister has to say on that. The Local Government Association’s briefing draws attention to the fact that, somehow, large vacant sites may not pay business rates at all. This appears to be an anomaly, and perhaps the Minister can throw some light on that as well

These Benches support the grace period for improvements, especially those designed to decarbonise or promote net zero, and the changes applied in this Bill to low-carbon heat networks. All that is very positive. However, we have concerns about the Valuation Office Agency’s responsiveness and accountability to ratepayers. My noble friend Lord Shipley has voiced concern about this, as has my noble friend Lady Thornhill, who asked about reciprocal responsibilities for the Valuation Office Agency alongside those in the Bill. There are new, very considerable burdens on ratepayers to provide more detailed information, so why not for the Valuation Office Agency as well? Can the Minister say how the work of the Valuation Office Agency is accountable to ratepayers? The only example I have is that it produces an annual report, which is a statement of fact rather than an opportunity for accountability to the business community.

I turn to the issue of business rate income. The changes to the existing system will mean a potential reduction in overall income as a result of the Bill removing the duty to be revenue neutral. As we know, local government depends on business rates for a large part of its funding. The Bill makes it clear that all business rate income has to be allocated to local government funding. However, where there is a reduction in income as a result of the Bill, the reference is only to compensation. It does not explicitly state there will be full compensation for loss of income. This is very important to local government, which is under huge financial pressure at the moment and cannot sustain any further loss of income. I look to the Minister, who has local government at her heart, to give us the assurance that any loss of income will result in full compensation.

In this context, I welcome the Government’s promise—I think to the Local Government Association—to consult on avoidance and evasion, along the lines of measures already introduced by the Welsh Senedd and the Scottish Government.

I support what my noble friend Lord Shipley raised about the devolution to councils of business rates, as has been done in the West Midlands. I thank the Local Government Association again for its briefing, which also includes the idea of devolution of more powers over income from business rates. The LGA’s asks include:

“Giving councils more flexibility on business rates reliefs such as charitable and empty property relief”


and

“Giving councils the ability to set its own business rates multiplier—


that would be interesting—

“or at the very least be able to set a multiplier above and below the nationally set multiplier”.

Finally, the Local Government Association underlines what all of us have said about the need for

“Consideration of alternative forms of income … including an e-commerce levy with the funding retained by local government”.


This has been an interesting debate, enhanced by the expert contributions of the noble Earl, Lord Lytton, the noble Lord, Lord Thurlow, and the noble and learned Lord, Lord Etherton. I look forward very much to the Minister’s response.