Planning and Infrastructure Bill

Baroness Pinnock Excerpts

2nd reading
Wednesday 25th June 2025 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I am speaker number 60, and this has been a long and wide-ranging debate. I thank all noble Lords who have raised important and pertinent issues for the House to address at the next stage. Some have been new issues, and I look forward to hearing about mediation processes within the planning system. I particularly thank my 10 Liberal Democrat colleagues for their contributions, which have been, as noble Lords have heard, both supportive and challenging in equal measure. Many of us have benefited from the professional groups, charities and individuals who have provided helpful information on which we could base our debate today. I remind the House that I have a relevant interest as a councillor on Kirklees Council in West Yorkshire.

This is a very significant Bill for our nation. It has the potential to fundamentally change the foundation of the Town and Country Planning Act 1947, which established the principle that planning permission is required for land development. It separated land ownership from the automatic right to develop it. Enshrined in that Act is local democratic decision-making, on both what land can be developed and how it can be developed. This democratic principle has gradually and properly expanded over the years to include and involve in the process those affected by potential development.

In the era of instant and easy communication of both factual and inaccurate information, the principle of local communities having their say and elected representatives making the decisions is ever more important. Ensuring the involvement of communities is vital in both hearing local information about a site and demonstrating that those directly affected are important in the process. The erosion of the local democratic process, as proposed in the Bill, is not acceptable and will not lead to swifter planning decisions, as many noble Lords from across the House have referenced. A better balance must be found between the needs of development and of local communities and their elected representatives.

Major infrastructure projects are, as we have heard, beset with delays and eye-watering cost rises—HS2 is just one of the examples that has been referred to in our debate—and change is necessary. Reducing the time taken to reach a decision is critical. Removing the pre-application stage, however, is a false economy, as it is at that stage that interested parties are alerted to the scheme and can have input, which helps the applicant make amendments in response. As there will be increasing numbers of nationally significant infrastructure projects, it is vital that communities are informed and engaged at an early stage, both in the detail of the application and in its prime purpose for the nation. Communities must feel that they can have their say if resentment at change is not to thrive.

Turning to the more specific planning process changes, spatial development strategies will do much to inform economic development, infrastructure investment and local strategies in a mayoral authority. I too remember, and was part of helping to develop, the previous regional development strategies 20-odd years ago. However, any such strategy must have the support of communities and their local elected representatives if it is not to be constantly challenged. The new clauses introduced into the Bill when it was taken through the Commons throw some light on how this will be achieved. What is not clear is whether all constituent authorities will have a place on a joint board and what decision-making powers the board jointly and severally has in relation to the mayor. Perhaps the Minister can provide some details on the membership and powers of the joint boards. She will have thousands of questions to answer when she sums up, so maybe a note would suffice.

On the proposed changes to the local planning system, the starting point for these discussions must be the knowledge that the local authority planning procedures vary greatly according to the type and size of council. Differences reflect the communities that are served, and a one-size approach to local planning definitely does not fit all.

Like other noble Lords who have spoken, I agree with mandatory training for members of local planning committees. I introduced it when I was leader of Kirklees 20 years ago. Members of planning committees then understand the constraints of planning and highways legislation; it is important and it helps the debate on any planning applications to focus on planning issues.

The number of members of a planning committee is also important. Limiting the membership must go alongside the rights of ward councillors to speak to the committee on a pertinent application. That is their elected duty and responsibility. Equally, as other noble Lords have said, local councils should have the right to choose the size of their planning committee so that it suits their local needs. Imposing top-down schemes of national delegation is not the way forward. There is no evidence that planning committees are the blockers—a contemptible accusation. Some 80% of planning applications are already approved, one way or another; some 90% are already delegated to officers’ decision-making. Of those referred to the Planning Inspectorate by developers, less than 3% are overturned on appeal. The planning system works—it just needs more investment.

The real blockers to housing development are the major housebuilders which acquire planning consent and then wait for an upturn in the market or even play the system with constant applications to alter aspects of the original planning permission. The evidence is clear. The Government could easily reach their target of 1.5 million new homes in this Parliament if the 1.2 million currently with planning permission were built. Reform of this part of the process is desperately needed. That is what needs to change.

There are families in every community who are desperate for a home at a social rent. The scandal of the Bill is that this need is not specifically addressed, nor is the urgent need to provide a definition of so-called affordable housing.

Part 3 of the Bill has attracted a very large number of comments and challenges from across the House, and rightly so. The proposal for a nature restoration fund reads like a developers’ charter. It enables developers to disregard the impact on and destruction of nature as a result of their development and salve their consciences by contributing to the fund. That will not do. Developers must be cognisant of the effect of their construction on habitats. The Bill could well result in some localities having their local habitats and green spaces destroyed, and the recompense is miles away. That is no good for them or for the biodiversity of the area. Fundamental changes to this part of the Bill are essential, and no doubt will be proposed.

Finally, the direction of travel envisaged in the Bill is one that we on these Benches support. However, the Bill has absolutely failed in finding the right balance between the competing ambitions of infrastructure provision, housebuilding and economic development on the one hand and community involvement, democratic decision-making and nature protection and enhancement on the other. We on these Benches will do all we can to work with the Government, where this is possible, to tip the scales in support of democracy, nature and communities.

Planning: Energy Efficiency and Fire Safety

Baroness Pinnock Excerpts

Monday 23rd June 2025 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

My noble friend is quite right. We will bring forward the future homes standard in the autumn—we are consulting on it at the moment—which will ensure that new homes are net-zero ready and that householders benefit from lower energy bills, with high levels of energy efficiency and solar PV. We made an announcement last week that the standard will include solar panels, which we expect to be installed on the majority of new homes. I have spoken to my noble friend on her point about disabled facilities, and we understand the frustrations of, for example, those applying for disabled facilities grants. The more we can make sure that homes are fit for everybody in our community, the better it will be. We are considering this further as we develop our housing strategy, which is due to be published later this year.

[Baroness Pinnock (LD)]

My Lords, the cost of cladding remediation is up to £40,000 per flat. Can the Minister tell the House how leaseholders, who are not eligible for grant funding from the Government and contractors, will be able to afford the remediation of homes which insurance companies believe are not safe to live in?

[Baroness Taylor of Stevenage (Lab)]

We are working very closely with leaseholder bodies to understand their issues. I understand the difficulties, and we are making sure that those responsible for the buildings are held to account and that they support leaseholders to get the work done. I am still talking to leaseholders, and we will bring forward more action on their general conditions in the leasehold Bill later this year. I know that this is a very difficult issue for them, and we continue to work with them on it.

Cladding: High-rise Buildings

Baroness Pinnock Excerpts

Tuesday 17th June 2025 Lords Chamber

[Lord Khan of Burnley (Lab)]

My Lords, as part of the work set out in our remediation acceleration plan, we intend that by the end of 2029, all 18 metre-plus high-rise buildings with unsafe cladding in a government funded scheme will have been remediated. Our intention is that every building of 11 metres-plus with unsafe cladding will have been remediated or have a completion date, or the landlord will be liable for severe penalties. On 26 February, the Government published the Construction Products Reform Green Paper, which sets out comprehensive proposals for system-wide reforms of the construction products regime. The Green Paper is a significant step towards a construction products regime that has safety at its heart. We welcome the extensive engagement from across the sector.

[Baroness Pinnock (LD)]

My Lords, I want to focus on tenants of social housing. The Minister has referenced the remediation acceleration scheme. There was supposed to be a report specifically on social housing in the spring, which has yet to be published. What plans do the Government have to help registered social landlords, housing associations and councils, so that they have the funding to remediate their flats and social housing tenants can live in safe homes?

[Lord Khan of Burnley (Lab)]

My Lords, I have some excellent news for the noble Baroness. Fresh from the spending review, we can confirm over £1 billion of new investment between 2026-27 and 2029-30 to accelerate the remediation of social housing by giving social housing providers the same access to government funding as private building owners. This will support providers of social housing to supply more affordable homes while also improving the living conditions of tenants. This Government recognise that social landlords face significant barriers to accelerating remediation of building safety risks, including access to upfront funding.

Birmingham City Council

Baroness Pinnock Excerpts

Tuesday 1st April 2025 Lords Chamber

[Lord Jamieson (Con)]

My Lords, until my right honourable friend the shadow Secretary of State tabled his Urgent Question yesterday, we had heard nothing from this Government on Birmingham City Council’s bin fiasco. Birmingham, the UK’s second city, the pride of industrial Britain, is now reduced to piles of rotting waste and rats. We are seeing scenes akin to those I remember as a child in the strike-plagued 1970s.

Almost every area is suffering from overflowing bins, with 17,000 tonnes of waste said to be clogging up pavements across the city. Depots have been blocked by picket lines, delaying contingency collection vehicles from reaching the streets and, all the while, uncollected waste is increasing at nearly 900 tonnes a day. The threat of a public health emergency hangs over the city, a threat that demands urgent and decisive action. What are the Government doing to address this terrible situation? For 20 long days, nothing. When the residents of Birmingham needed a solution, the Government stayed silent.

This is a problem of the council’s own making; for too long, waste services have been a problem in the city. My son was at Birmingham University eight years ago and the recycling waste was not collected on his street for several months despite numerous calls to the council, and it has got worse. The flawed deal with Unite back in 2017, which then led to legal action over pay, built the foundation on which Birmingham’s mountain of rubbish sits today. Despite the Labour-run council knowing about this since then, it has failed to address the issue. That is why Birmingham residents find themselves with piles of waste in the streets.

What are this Government going to do to address these failings? On these Benches we are calling for a COBRA-led response—a co-ordinated effort across local and national government, harnessing the experience of emergency services and public health officials, where every resource is summoned to resolve this nightmare. Will the Minister confirm what discussions the Government have had within the department to resolve this emergency?

On these Benches, we are calling on the Government to engage with the private sector service providers to help clear up the mess and save residents from a disruptive bin strike with no end in sight. We need action today. I urge Ministers to pick up the phone to those complicit in holding Birmingham hostage to end this strike and restore cleanliness to their streets.

Unite has called on central government to make hundreds of millions of pounds available to the council. If that something the Minister is considering? What is more, is a council tax increase of 7.8% a clear breach of the Prime Minister’s pledge to freeze council tax? Does asking the residents of Birmingham to pay more while getting less show that Birmingham council has failed?

Now that Birmingham has declared a major incident, leading to the availability of new mechanisms, can the Minister confirm that she will meet with the council to ensure that those mechanisms are considered? We understand that the declaration should mean that the council will increase the availability of street cleansing and fly-tipping removal, but can the Minister confirm how many additional vehicles will be deployed in the coming days and what the department is doing to ensure that bin lorries can safely enter and exit the council’s waste depots? It is shameful, and a national embarrassment, that one of our nation’s great cities finds itself in such a bleak situation.

[Baroness Pinnock (LD)]

My Lords, 17,000 tonnes of uncollected household waste creating mountainous heaps of stinking rubbish on the streets of Birmingham is simply unacceptable—particularly in terms of the public health hazard that is created. As a result, and after three weeks of a strike by bin workers, the city has declared a major incident. It is expected that this will allow the council to implement a contingency plan to clear the waste mountain from the streets. So my first question to the Minister is: how confident are the Government that the waste will be cleared before the Easter holidays? Given that this emergency action has been taken because of the growing public health risk, how sure are the Government that diseases caused by a combination of rotting rubbish and rats can be prevented? My third question is: what are the public health risks faced by residents living in those parts of Birmingham where the rubbish mountains are worst?

The very challenging financial strictures facing the city council are of course one cause of this dire situation. The apparent failure to tackle the long-standing equal pay claims from women employed by the council is another contributory factor. Equal pay claims have been a challenge for councils across the country. Some resolve the problem by outsourcing: others, including my own council, resolved the absolutely unfair pay systems over 20 years ago by working with unions to agree a single pay spine and settling women’s claims for lost pay. |If that was 20 years ago, can the Minister explain how it is that, in Birmingham, equal pay claims were allowed to fester for so long?

I raise the significance of equal pay as the council cites it as a fundamental reason for not being able to settle the current dispute. Can the Minister comment on whether Birmingham City Council has finally resolved historic equal pay claims and whether existing pay for all employees is on a fair footing?

It is of course right to acknowledge that Birmingham has had a reduction in its core funding of 40% or more, which has left the spending level per person 19% lower than 14 years ago. In more deprived areas, the loss per person is nearer to 26%, according to a report from the IFS. Clearly, the huge loss of funding has put the council into very difficult circumstances. Eleventh-hour additional funding from the previous Government helped forestall the financial collapse of the city council. As a consequence, very difficult decisions have had to be made. Can the Minister confirm that major change to support council finances is needed and will come?

Finally, it has to be asked whether Birmingham City Council is too large. It serves 1.2 million people, which makes it the largest local government authority in Europe—double the size of the next largest in this country. With just 101 councillors, each one serves over 12,000 people. Can the Minister explain how community representation can occur under these circumstances? The reason for the question is that the different needs and aspirations in a council of that size are hard to meet when elected representation is on that scale. It seems likely to have contributed to the problems now being faced. Does the Minister agree?

Birmingham is a great city. It needs the support of the Government and Opposition in aiding a recovery. I look forward to the questions asked being answered, either now or in writing.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

I thank both the noble Lord and the noble Baroness for their questions. I will elaborate on the Statement a little but, before I do, the tone taken by the noble Lord, Lord Jamieson, showed no acceptance of the 14 years of funding withdrawal from local government. That is at the heart of this problem.

I would like to update the House on the statutory intervention at Birmingham City Council, which was part of the reason for this Statement in the other place, and on issues affecting the waste service, following the Statement made by my honourable friend the Minister for Local Government and English Devolution in the other place yesterday. This Government were elected on a manifesto that pledged to fix the foundations of local government and we have set about doing that with some energy. The public rightly expect and deserve well-functioning local councils that provide the essential statutory services that residents rely on.

Local councils must be fit, they must be legal and they must be decent. Commissioners have been working with Birmingham City Council for the last 18 months to support the council in its recovery. Their latest report on that progress was published by the Government yesterday and lands at a point of acute difficulty for residents in Birmingham. As we know, the ongoing waste dispute is resulting in rubbish piling up in the streets, so I will also take this opportunity to give the latest update on the status of that dispute.

The council has taken important initial steps forward on its improvement journey and is working constructively with commissioners. It has made significant progress in addressing historic equal pay issues and fixing the foundations of its governance. The leader, Councillor Cotton, and his group are taking difficult decisions to get the council back on track. The commissioners have recognised that, and that his calm leadership through stormy waters is definitely moving the council forward. The new managing director, Joanne Roney CBE, has brought a steady hand and is beginning to make permanent senior appointments that will contribute to that much-needed stabilisation. The council has also achieved a breakthrough by achieving an agreement to settle the outstanding claims to end the ongoing equal pay saga. It has also set a reimplementation strategy for the Oracle system, which was part of the issue there.

That improvement is encouraging, but deep challenges remain. In the short term, commissioner oversight and close supervision will still be required to maintain the momentum that has started to build. There is a difficult road ahead on the key aspects of the best value regime—governance and culture, financial management and service delivery—because substantial risks threaten the journey to reform and recovery.

As we all know, there is a live industrial action in waste services involving one of the three unions recognised at the council. The Government will support the leader and his team at Birmingham, directly and through the commissioners, to move the council on from these historic issues. That includes an increase in core spending power of up to 9.8%, or £131 million, for 2025-26, including £39.3 million of new one-off recovery grant, illustrating the Government’s commitment to correcting the unfairness in the funding system; and an “in principle” agreement to the exceptional financial support, totalling £1.24 billion.

The noble Lord, Lord Jamieson, raised the issue of council tax, but actually it was his Government who signed off a 10% council tax increase in Birmingham last year. That was more than the council put up its council tax by this year.

Councils deliver more than 800 services and make a huge difference, but it is accepted that for many, the most visible and universal service is the collection and disposal of household waste. Many noble Lords know that the current industrial action in the city is causing misery and disruption to local residents. I am not going to make light of that; I know how difficult it is for them.

From the outset, we want to be clear that statutory intervention is led by commissioners and Ministers, who cannot legally intervene in the industrial action. The Minister for Local Government and English Devolution has been in regular contact with the leadership of the council throughout as it has sought to find a resolution which, importantly, maintains the reforms needed to build a sustainable council and which also returns waste collection to a normal functioning service. This is causing public health risks to the city’s most vulnerable and deprived and, as a result, yesterday Birmingham declared a major incident to give it the mechanisms to better manage the impact on residents. I support that decision, and this Government will back local leaders to bring the situation back under control in the weeks to come.

The Government will not hesitate to provide support in any way that Birmingham’s leaders need and, as Parliament would expect, a meeting with the leadership of the council, the commissioners and other key local partners is taking place to make sure that we are doing everything we can to protect public health. I spoke to Councillor Cotton myself this afternoon to ask him if there is anything further he wants us to do.

It is in the interests of all parties—and, most importantly, the people at the heart of this, the residents of Birmingham—that the industrial action is brought to a close in a meaningful and sustainable way as soon as possible, and we encourage all parties to redouble their efforts, get round the table and find that resolution. Councillor Cotton confirmed that live negotiations are ongoing; that work is still continuing. To do this, any deal to end industrial action must maintain value for money and ensure a fit-for-purpose waste service, without creating or storing up liabilities for the future. All parties recognise that Birmingham’s waste service has been in urgent need of modernisation for years. Any deal reached must not repeat the mistakes of the past.

Practices in the waste service have been the source of one of the largest equal pay crises in modern UK history, resulting in costs of over £1 billion. This situation simply cannot continue, and that is what needs resolving, and resolving urgently. Our Government will support the council in its journey to creating the sustainable, fair and reliable waste service that the residents of Birmingham deserve. We will support the council to resolve historic issues and to continue to establish the leadership, governance and culture that will transform the services and deliver good-quality public services for the people of Birmingham.

On the noble Lord’s specific questions and his comment about failing to address the issue, there have been consistent meetings and discussions with Birmingham throughout this situation to make sure that we give it any support it needs, but it is right that it should be Birmingham City Council’s decision to enable co-ordination between public sector partners on the ground in Birmingham. That is why it has declared this major incident—to ensure that public safety and health is restored. While the situation in Birmingham is clearly very serious and deteriorating, the declaration of a major incident is a well-established mechanism for ensuring that public sector partners can co-ordinate locally to deliver a resolution.

The noble Lord asked whether COBRA would be convened. COBRA is used for significant crises which require a collective government response, co-ordinated at the centre by the Cabinet Office. We are in regular contact with Birmingham City Council, and local leaders are confident at the moment that they can manage the situation. Should this change, we stand ready to respond to any ask for support.

The noble Lord asked how many bin lorries are active. He will be aware that one of the issues was the blocking, as part of the strike action, of bin lorries’ entrance to and exit from the depot. We are hoping that that can be resolved as the negotiations go forward. I cannot tell him off the top of my head exactly how many bin lorries are able to operate, but I shall come back to him in writing on that.

The noble Baroness asked how confident we are that waste will be cleared before Easter. We all want to see this situation resolved as quickly as possible. I hope that, with the good will of all parties, and given that they are still in negotiations with each other, we will be able to resolve this dispute sooner rather than later.

The noble Lord asked about sending in staff or giving extra money to help clear up the rubbish, and whether we would send in private contractors to do that job. As you all know, I am a firm believer in devolution and in letting local people sort the issues out locally. It is right that the response is led by the area’s key public sector partners. We are in regular contact with those local leaders, and negotiations are still open.

On the issues relating to public health, the director for public health at Birmingham City Council is part of the response, and the impact assessment of the strike is closely monitoring the situation on the ground and will continue to do so. The UK Health Security Agency met with the director for public health yesterday and will remain in close contact to ensure that all parties are well informed.

Issues were raised about equal pay, and of course, the noble Baroness is right to say that we needed to resolve those. They were entrenched and affected some of the female workers in Birmingham enormously. We have to give credit to Birmingham for working its way through what has been a very long and hard process. I have gone through one of these equal pay settlements myself. The trade unions have been involved in resolving most of the issues; this is that last part of that process, and the matter is still outstanding. As I say, we urge everyone concerned to get round the table and resolve this now.

I hope that that has answered all the questions. The noble Baroness asked about the size of the council. We are going through a process with all councils of discussing how we take things forward, but it is important that, at the moment, we leave the commissioners and local leadership in Birmingham to do the work they need to do to turn the council around. That work is progressing well; there is still a lot more to do but a lot has been done already, so I hope we will get to where we need to be.

The noble Baroness also referred, rightly, to funding cuts. Birmingham City Council received the sharpest cuts of any council in the country. Because it is the biggest council in the country, the ripple effect that we all felt in local government from the horrendous hollowing out under the last Government hit Birmingham like a tsunami, so I do not think the Benches opposite have much right to criticise what went on there.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Baroness Pinnock Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 1st April 2025 Lords Chamber

However, this is a House of scrutiny and, given the financial deadlines associated with this Bill, I will not be pressing any further amendments. But I sincerely hope that, in 12 months’ time, our high streets will not have been hollowed out any further, although I am extremely concerned that this Bill will only worsen their decline and, as importantly, that children will be forced to leave independent schools, disrupting their education and putting more pressure on our state system.

[Baroness Pinnock (LD)]

My Lords, last week there was a considerable majority of support in this House for an amendment tabled in my name, which enabled the Government, by regulation, to prevent the higher multiplier from being applied to NHS properties, mainly consisting of 290 of the major hospitals in England. I was surprised to hear the Minister say just now that there is sufficient leverage within the Bill to enable those changes to be made. I ask him now to write to me to explain how that will work.

It is most disappointing that the Government felt unable to accept the amendment. However, it is clear that the Government have very challenging decisions to make. Nevertheless, given that reducing waiting times is a key priority, we on these Benches were hoping for—and indeed hopeful of—government support on this issue. We recognise at this stage that we can take the Bill no further and we will not press any further amendments.

Finally, I want to give thanks to all those who have taken part in this interesting Bill, which attracts those of us who like to understand how business rates work, who benefits and who does not. We look forward to the digitalisation of the whole process, whereby changes could then be made. From these Benches, we thank all who have taken part, including the Whips’ Office, which has given me enormous support, as well as the Minister and his team for all the helpful conversations that we have had. They did not get anywhere but, nevertheless, I thank the Minister for always being willing to meet.

[Lord Thurlow (CB)]

My Lords, it has been an interesting and lively debate through all its stages, covering the many aspects of the broad landscape of this Bill. I thank all who took part and supported my amendments from across the House right through to this final stage. I add my thanks to the Minister and his team, who have spent a good deal of time on a number of occasions, willing to engage with me to try to find compromise and a way through the complicated and difficult elements of the Bill, which have become quite technical and needed a deep dive.

I feel a sense of real regret. The Government have missed a real opportunity to deal once and for all with the injustices heaped on the small high-street retailers, which continue to subsidise the rates paid by these mammoth non-high-street retail fulfilment centres: the internet operators exclusively—not the ones on the high street that have fulfilment centres but the ones that are not on the high street. It is tragic that this opportunity has been missed. It is a wrong that the Bill could have put right. The Minister’s proposals address aspects of this, but possibly not for many years to come. The digitisation process of non-domestic rates, which we have discussed, is in hand and planned for 2028, but I wonder whether, like many other government initiatives, it will take many years longer than expected. What a waste. It was not too difficult—an opportunity missed.

It is not my desire to prolong the debate, notwithstanding the reasons cited for refusal in the other place, which left the door open. I think we have done enough, and HMG should not be frustrated in their manifesto items. I thank the Minister for his opportunity to continue a dialogue going forward, which I would like to engage in if I have not been put in front of the firing squad as a hereditary before that time comes. I will not press my amendment.

Non-Domestic Rating (Multipliers and Private Schools) Bill)

Baroness Pinnock Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 26th March 2025 Lords Chamber

Moved by

[Baroness Pinnock]

At end insert “, and do propose Amendment 1B in lieu—

1B: Clause 1, page 2, line 6, at end insert—
“(1A) Regulations under sub-paragraph (1)(a) may specify that occupied hospitals, medical and dental schools, and any other healthcare settings as may be prescribed in the regulations are not subject to the higher multiplier.””

[Baroness Pinnock (LD)]

My Lords, as the Minister said, the higher rate or multiplier being introduced in this Bill is to apply to all properties with a rateable value of more than £500,000. This is a worthy attempt by the Government to have a fairer approach to business rates.

However, 290 hospitals are captured by this new banding. It means a considerable increase in their business rates—potentially, a 20% increase—for which government funding has not made provision, so hospitals will have less funding to drive down waiting lists, which is an aim that has all our support. I give just one example: University College Hospital here in London has a rateable value of nearly £12 million. With the new higher multiplier, its business rates will increase by over £1.2 million.

Amendment 1B, in lieu of Amendment 1, would provide the Government with the option, by regulations, to exclude hospitals from this higher banding. At this late stage, I urge the Minister to agree. None of us wants to see waiting lists not going down as fast as they could because of the Government’s reluctance to exclude hospitals—not from business rates, just from the higher multiplier.

I will speak very briefly to the other Motions. Motion B1 in the name of the noble Baroness, Lady Scott of Bybrook, is very important to the viability and vitality of our town and city centres. We on these Benches are minded to support the noble Baroness on this issue if she wishes to take it to a vote.

Motion N1 in the name of the noble Lord, Lord Thurlow, would provide the Government with a way forward to address cliff-edge issues when there are hard divides between different multiplier levels. This is of concern to businesses and, again, we will support the noble Lord if he intends to divide the House on this issue. I beg to move Motion A1.

[Baroness Scott of Bybrook (Con)]

My Lords, first, I declare my interest as a vice-president of the Local Government Association. This group of amendments addresses the ongoing issues with Clauses 1 to 4 that have been debated throughout the progress of the Bill. These clauses present two major problems. They do not reflect the Government’s previously stated ambition to reform the business rates system in order to protect the high street and ensure that online businesses pay their fair share. The higher multiplier will damage businesses on the high street and drive them out of town centres.

The Bill is an attempt by the Government to deliver on their manifesto commitment to reform the business rates system, but they have instead used a blunt instrument as a cut-off. That means that a number of businesses will be paying this higher multiplier, which they should not be doing. The Government will be hitting stores up and down the high street. Despite promises that reform will follow, the Bill leaves a number of important high street businesses paying higher rates, with no certainty at all as to when the situation will improve.

--- Later in debate ---

[Lord Khan of Burnley (Lab)]

My Lords, I thank all noble Lords who took part in this short debate. We heard concerns that the measures in the Bill for new multipliers do not deliver on the stated intention of the policy as announced at the Budget. I do not agree with that. At the Budget, the Government announced their intention to introduce two lower multipliers for qualifying retail, hospitality and leisure properties and, in particular, to end the uncertainty of annual RHL relief. RHL is a temporary stopgap measure that has been extended year on year since the pandemic, and it does not provide the certainty that businesses require. The Government, through this Bill, are taking steps to address that. It was also announced at the Budget that the permanent tax cut for RHL businesses needs to be sustainably funded. This is an appropriate and prudent approach. The challenging fiscal environment that the Government face requires this, but it goes without saying that any tax cut must be funded as part of sound financial management. To do this, the Government intend to introduce a higher multiplier for the most valuable properties, those with a rateable value of £500,000 and above. The higher multiplier will affect less than 1% of properties in England. This delivers on the policy set out at the Budget by the Chancellor. Furthermore, it represents the Government’s first step to delivering on their manifesto commitment to transform the business rates system to one that is fairer, protects the high street and is fit for the 21st century.

I have explained to noble Lords here today while the amendments tabled in lieu are not necessary. For these reasons and the other reasons I have already set out, I respectfully ask noble Lords not to press their Motions containing Amendments 1B, 2B, 7B, 8B, 13B and 14B.

[Baroness Pinnock (LD)]

I thank the Minister for his response, which gave me no hope that the Government are considering relieving hospitals of the higher multiplier. We agree with him that retail, hospitality and leisure businesses should benefit from the lower multiplier in the Bill, but it should not be at the expense of the NHS. There are other ways of doing it, and I am appalled that the Minister has not sought to find alternative sources of income. So because we on these Benches wish to make sure that our hospitals do not lose a penny more in business rates to the Government, I beg leave to test the opinion of the House.

--- Later in debate ---

Motion G1 (as an amendment to Motion G)

[Baroness Pinnock]

Moved by

At end insert “, and do propose Amendment 7B in lieu—

7B: Clause 1, page 2, line 6, at end insert—
“(1A) Regulations under sub-paragraph (1)(a) may specify that unoccupied hospitals, medical and dental schools, and any other healthcare settings as may be prescribed in the regulations are not subject to the higher multiplier.””

[Baroness Pinnock (LD)]

My Lord, this is a consequential amendment on Motion A1. Presumably, that one has passed.

Motion G1 agreed (as an amendment to Motion G).

--- Later in debate ---

[Lord Thurlow (CB)]

I want simply to add to these very moving and persuasive comments. It seems to me the most terrible act of self-harm to tax the schools again and again. It is not just VAT and the non-domestic rates but national insurance increases on staff and employees, and, in recent years, a compulsory increase to pension provision outside any private arrangements the schools may make. Those are four separate recent taxes. When is this bleeding going to stop?

[Baroness Pinnock (LD)]

My Lords, we on these Benches believe that there is a principle at stake of not regarding independent schools as charities. Education is not a profit-making business, although independent schools have to cover their costs—which, as I have sadly heard, Fulneck School has failed to do. We will support the noble Baroness, Lady Barran, if she wishes to test the opinion of the House.

[Lord Khan of Burnley (Lab)]

My Lords, I thank all noble Lords for their important contributions in this debate. The noble Baroness, Lady Barran, has stated her firm belief that no education should be taxed. She has also reminded this House of her view, shared by the noble Lord, Lord Mackinlay, that the Government are creating a two-tier charity system. The measure delivered through this Bill is a tough but necessary choice to ensure that the Government can deliver on their commitments and break down barriers to opportunity for all. Tough choices are difficult—the Government know this—but they are also necessary. This Government will take these tough decisions because of the financial climate out there.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Baroness Pinnock Excerpts

3rd reading
Monday 24th March 2025 Lords Chamber

[Baroness Barran (Con)]

My Lords, in concluding this Bill, I first thank my noble friends who have supported me, in particular, my noble friends Lady Scott of Bybrook and Lord Jamieson, in our work to protect high streets and independent schools. I also thank noble Lords from across the House, who have spoken in support of the many sectors that risk being negatively impacted by the Bill. In particular, I thank the noble Lord, Lord Fox, and the noble Baroness, Lady Pinnock, for their work on helping businesses up and down the high street. I thank the noble Lord, Lord Storey, for his support in protecting independent schools, and the noble Lord, Lord Thurlow, for his amendment that calls for the reform to the business rate system that the Government have failed to deliver through the Bill. I thank the Minister for the very constructive and positive way that he has engaged throughout the passage of the Bill.

On these Benches, we are pleased that a number of issues, on which the House has been united, have allowed us to encourage the Government to make changes to the Bill. Anchor stores, manufacturing businesses and healthcare hereditaments will likely face increased business rates through these proposed changes, especially with regard to the higher multiplier. I hope the other place will consider the sensible amendments that retain the current standard multiplier for these crucial sectors.

The amendment in the name of my noble friend Lord Jamieson is key in exploring the impact of the threshold of the higher multiplier. Its cliff-edge nature is particularly concerning, and despite the Government’s insistence that they want to focus on growth, this threshold will impact the decisions many businesses will take, and not in the direction that the Government seek.

The noble Lord, Lord Thurlow, is right to call on the Government to consider when they will pursue a reform of the business rate system, in line with their manifesto commitment, to ensure that online giants pay their fair share of business rates. As the Government have not delivered such reform, they should indeed commit to publishing a review of when they will do so.

As I said in relation to my amendments, I was pleased to see Clause 5 removed, given that it addresses directly the principle of taxing education and having a two-tier charity system. We on these Benches look forward very much to seeing the response in the other place to these very reasonable issues.

[Baroness Pinnock (LD)]

My Lords, I start by thanking the Minister and his civil servants in the Bill team for the very helpful discussions to aid detailed understanding of the Bill. The one issue that still irks me is that it was debated without an impact assessment. The convention now seems to be that this is the case, but I find it unacceptable that we have debated and agreed a Bill of this nature and with the implications that it has on many businesses. I believe it is unacceptable to do so without an impact assessment.

However, we on these Benches are delighted that the 290 hospitals which were destined to have the higher-rate multiplier applied will be excluded from that penalty. We hope that the other place will agree with the sanity of this proposal. The Minister said that the aim of the Bill was to protect the high street. It is not clear that that will be achieved by the Bill, and only time will tell, but I am sure the Minister will be pleased to know that I will be keeping a watchful brief on this issue and questioning him at regular intervals if the high street is not benefiting from these elements of the Bill.

Given that, I thank my noble friend Lord Fox, who did much of the work on the implications for business, and the ever knowledgeable and wise Elizabeth Plummer in our Whips’ Office, who was able to give me sound advice on the course of the Bill. With that, I thank the Minister and look forward to the consequences of the Bill.

[The Earl of Lytton (CB)]

For my part, I too add my thanks to the Minister for his willingness to engage at all times. As he now knows, business rates is a rather niche area of activity for your Lordships. I started my professional career just over 50 years ago in the Inland Revenue Valuation Office, so I have been tied to this problem for a long time. If I have come across as a bit of a business rates nerd, I apologise to the House.

The Minister mentioned Mr Nick Cooper, whom I have known a long time through several Administrations, and I think it was he who was astute enough to observe that this might, given that my time here may be limited as a retained hereditary Peer, this might be the last occasion on which I would have to bore your Lordships on a matter to do with business rates. So there is something positive for your Lordships to look forward to.

I thank the noble Baronesses, Lady Scott of Bybrook and Lady Pinnock, and the noble Lord, Lord Fox, and my colleague and noble friend Lord Thurlow, for their willingness to discuss matters of crucial importance.

I take the point made by the noble Baroness, Lady Barran, that the manifesto said one thing and this is not what we were led to expect. However, for all the talk and all the policy-making, and for all the manifestos, you do not get to alter economic reality, nor do you get to alter markets very much. Therefore, I suspect that the process of partial attrition which has gone on in the business sector, particularly over issues to do with high streets, will continue, so long as the root and branch reform that is so badly needed and which successive Administrations have promised is not delivered. It is tough when you are dealing with something that is cheap to collect, but we must understand the consequences of lack of fairness and lack of balance, and what this means for business decisions made here and where moving an operation abroad is an alternative.

Finally, I thank Jerry Schurder and Simon Green of Newmark surveyors, who have been an unfailing source of useful information on the background to current business rates. I am not a current practitioner, so I pay tribute to them and to others from the Rating Surveyors’ Association and the RICS, both of which I am a member of.

With that, I wish this Bill well. I am certain that it will reappear. I am not complacent that this is the last word on the matter, but we have given it our best shot in what is a rather difficult and complicated area. I wish it well and share the views of other noble Lords in hoping that the other place has regard to the rationale behind our efforts.

High-rise Buildings: Safety Remediation

Baroness Pinnock Excerpts

Monday 24th March 2025 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

The remediation action plan points to the action that we need to take to move this on more quickly. Developers have determined whether work is required on about 80% of buildings for which they have taken responsibility under the remediation contract. Both developers and the Government are committed to accelerating that progress, which is why we have the plan that we published on 2 December as a joint plan. Thirty-nine developers have signed up to that and we will be moving that forward. If they fail to hit those joint plan targets, further action will be taken.

[Baroness Pinnock (LD)]

My Lords, the Government have introduced a new and lower standard of remediation, PAS 9980. Insurers, however, are not convinced that this makes buildings fully safe. The Public Accounts Committee has brought it to our attention that insurance costs remain, in its word, “unaffordable”. What are the Government going to do to address the criticism of the Public Accounts Committee and ensure that insurance costs drop considerably, so that people can afford to remain in their homes?

[Baroness Taylor of Stevenage (Lab)]

The noble Baroness is quite right to raise the issue of insurance premiums. Work has been going on to reduce those premiums for leaseholders. We have seen improvements for leaseholders who previously found themselves unable to sell or remortgage their homes, but we remain vigilant and will continue to hold the 10 major lenders to account, following their commitment to lend on properties even if the remediation is not yet complete.

Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025

Baroness Pinnock Excerpts

Monday 24th March 2025 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

I was going to pause for a moment to see how many people flooded out; how nice it is to have your Lordships all here.

I thank the Minister for taking the time to discuss and explain the Government’s thinking on this decision to postpone some elections for at least a year. The promise to reorganise local government was in the Labour Party’s manifesto, but the method to be used was not, so this statutory instrument is not delivering a manifesto promise and therefore this House is well within its rights to vote against the proposition.

It is always a bad idea to cancel elections at the best of times, and this is clearly not the best of times; in fact, one could say it is the worst of times. We have more cuts to services at the moment than we have had for some time; they are already on their knees. We have council taxes going up again as people pay more for less. Local government is in a bit of a state, so I do not see the common sense in delaying elections and then starting them up or running them a year later with a plan to allow the current councils to devise the next move towards reorganisation. People have a right to vote—that is what being in a democracy means—and the timetable is set out and understood by the general public, so changing that seems a little unprincipled.

It is hard to think of anything less democratic than cancelling elections ahead of a significant change in local democracy; it is straight out of an authoritarian playbook. Creating a devolved mayoralty by cancelling county council elections just seems odd—in fact, nonsensical—and again is undemocratic at the very least. This rushed decision means that voters will not have the chance to have their say on new councillors for at least a year. That means that the councils that have delayed elections do not actually have a mandate to do the reorganisation that the Government are asking them to do. Voters should be able to decide which councillors will have the opportunity to plan for the new structure. Local political parties ought to put such plans into their manifestos for voters to see and vote for or against.

A lot of people who could potentially vote in May in the postponed elections will now be denied the chance to protest, complain and elect people who have a different vision of how their area should be run. I am told by a councillor in East Devon District Council that the council has already begun acting in line with the proposed reorganisation, despite no public consultation taking place due to an alleged lack of time, which is something that we have heard from the Government as well. Decisions have therefore been delegated to unelected officers and executives, raising clear concerns about democratic accountability and statutory obligations under the Localism Act 2011. In addition, the councillor admitted that neither councillors nor the electorate have a clear understanding of how this organisation will work or even what it will be, yet actions are being taken regardless. It seems that local authorities are already acting under the influence of centralised restructuring before it has even been democratically validated.

Is it really for the Secretary of State to select which elections can go ahead and which cannot? Does it not set a dangerous precedent to allow a Secretary of State to make these decisions? It is not a national emergency like Covid, when we understood why elections were postponed and which justified that decision. Do we accept that, for whatever good reason the Government think, the Secretary of State can disrupt the election cycle and delay elections to a convenient time? That is more than authoritarian, it is almost Trumpian—and I have to ask, is it legal? Earlier I consulted a member of the Bar, who is not in his seat. He said, “Oh, it depends”, which is probably what I should have expected. This fatal Motion would green-light the postponed elections to go ahead. But Labour have tabled this vote at the last possible moment on the last possible day so that the Government can now say to us, “It’s too late to go ahead”.

We are going to have mayoral elections next year, in 2026; I understand that the delayed elections will all be held then. Can the Minister reassure me that all delayed elections will be run next year? Then, in 2027, the new shadow principal authority will be elected. Again, this is quite fast. I understand that the Government promised this and therefore they need to move fast, but I am very concerned about the democratic processes here. Can the Minister confirm that this means that some councils and some councillors could be in post for three years beyond their original mandate?

There is also the problem of this being not about devolution at all but about making it easier for the Government to liaise with fewer stakeholders—that is, mayors. This is sucking power upwards and is not devolution at all. It is about the Government making life easier for themselves and giving local people less say in what happens in their local area.

Strategic planning decisions will be taken out of the hands of people who know the area and given to the mayor, who could take decisions against the interests of local residents. This is a reason not to rush into postponing elections. I am concerned about whether there has been an assessment of whether this arrangement will save money. Will it improve efficiency and support social cohesion? Will it give local people more access to knowledge and decision-making? If there is a report or an assessment, I am curious about who wrote it and when. I look forward to hearing the Minister’s answers, but clearly what is happening is not democratic. On that principle alone, I beg to move.

[Baroness Pinnock (LD)]

My Lords, I have relevant but not direct interests as a councillor and as a vice-president of the Local Government Association.

Elections are the bedrock of our democracy and should not—indeed, must not—be cancelled. Some 5.6 million people are being denied the right to vote this May in elections to seven county councils and two unitary councils. The critical question is, why have the Government agreed to such an anti-democratic measure? The Secretary of State’s justification is that the Government have what they are choosing to describe as an

“ambitious programme of local government reorganisation”

and devolution that will eventually see the demise of councils based on historic counties and the abolition of district councils. In their place will be unitary councils with a population of 500,000, making them much larger than any of the London boroughs. Some yet-to-be-agreed combination of councils will then elect a single person, a mayor, with considerable powers on, for instance, strategic planning—as we heard from the noble Baroness, Lady Jones—where the mayor will be able to allocate land for development without the agreement of residents.

The nine councils with cancelled elections were assessed by the Secretary of State to be more prepared than most in their reorganisation plans, and that therefore it

“would be an expensive and irresponsible waste of taxpayers’ money”

to hold elections

“to bodies that will not exist, and where we do not know what will replace them”.—[Official Report, Commons, 5/2/25; col. 767.]

However, in a meeting with the Minister it became clear that the reason for elections being cancelled is that the first step in consulting residents and interested parties had begun in February and would continue until April during the election period. This, rightly, was not acceptable. The option that does not seem to have been considered was to delay the elections until June. That has occurred in the recent past, on more than two occasions, and would both accommodate the need to consult and enable a new mandate to be given to decision-makers.

Furthermore, the cancelled elections will apparently take place in 2026, when it is expected that there will be elections for a new mayor and councillors to the county councils, which will still exist, and district councils. That is the advice we have been given. County councils and district councils will then make decisions on the geography of new unitary authorities. A new mandate from the electorate is therefore absolutely essential before those decisions are made, and not after—which is what will happen if these elections are cancelled.

Had we had elections, it would have had the benefit of alerting residents to the major changes being proposed, and getting their views direct to councillors. They would have been able to elect those they agree with and not elect those they do not agree with. That wide discussion is obviously not seen to be desirable by the existing council leadership—who called for the cancellation of the elections—and the Government.

It is on this particular aspect—the discussion element of this decision—that the Secondary Legislation Scrutiny Committee has raised concerns and drawn them to the attention of the House. The first of these concerns is about the extent and depth of the opposition to the cancellation of elections. The committee is highly critical of the Government for having failed to provide a response to the issues raised. Can the Minister provide a response—which should have been given to the concerns raised by the Secondary Legislation Scrutiny Committee—to the House before this vote is taken?

Surrey County Council is the exception to the situation I have described, because the reason for the cancellation of its elections is due to the dire financial state of some of its councils—one in particular has debts of more than £1 billion. The Government are enabling the county council, which is also in debt, to push through a reorganisation against the will of the districts. This is a democratic disgrace.

The Motion in the name of the noble Baroness, Lady Jones of Moulsecoomb, is deficient in its statement, in that it fails to mention the substantial purpose, which is the reorganisation and devolution plans of the Government. It is most unfortunate that the noble Baroness was unable to agree to a single Motion to Annul that had been the subject of a tentative agreement last week. If the noble Baroness puts her Motion to a vote, we on these Benches will abstain, in favour of voting for the stronger and more comprehensive Motion in my name.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Baroness Pinnock Excerpts

Report stage
Tuesday 18th March 2025 Lords Chamber

Moved by

[Baroness Pinnock]

1: Clause 3, page 3, line 26, after “hereditament” insert “other than a qualifying healthcare hereditament”
Member’s explanatory statement
This amendment, together with Baroness Pinnock’s amendments to page 3, line 37, page 4, line 6, and page 4, line 17, would have the effect of retaining the standard multiplier for hospitals, medical and dental schools, or any other healthcare setting to be determined by regulations.

[Baroness Pinnock (LD)]

My Lords, I remind the House of my relevant local government interests, in particular that I am a councillor in Kirklees. At the outset, I wish to express my thanks to the Minister and his officials for their time in discussions on the details of the Bill. I had assurances at those meetings that the measures in the Bill are not designed to increase business rates revenue, although that ignores the consequence of the Bill that, for RHL—retail, hospitality and leisure—businesses, Covid relief disappears, and the difference is partly funded by those businesses. Importantly, the Minister also confirmed that local government funding in totality would not be affected and that, “as far as is practicable”, no individual council would find itself worse off as a result.

What is unfortunate, though, is that the Government have been unable to share the basic assessment that must have taken place to provide the assurances given. Thus there is no clarity about the impact of these changes on individual properties—hence Amendment 1 and consequential Amendments 9, 10 and 17 in my name and that of my noble friend Lord Fox, which seek to understand the impact of the changes on the NHS.

The useful information shared by the Minister from the Valuation Office Agency shows that 290 NHS hospitals will be caught by the new £500,000 threshold. Given that the standard multiplier is currently 0.546, or 54.6 pence, in the pound and the Bill enables the multiplier to increase to 0.646, or 64.6 pence, in the pound, for these higher-band properties, this will cost those hospitals dearly.

I warned the Minister that his failure to provide examples would mean that I did the calculations. For example, the Great Ormond Street Hospital for Children has a rateable value of £5.9 million, and its business rates costs will rise from £3.2 million to £3.8 million, an additional burden of £600,000 per year on business rates alone. The John Radcliffe Hospital in Oxford has a potential business rates increase from £3.4 million to £4.1 million. Going further north to my own county of Yorkshire, the Hull Royal Infirmary could see its bill rising from £1.8 million to £2.1 million. Those are typical figures for hospitals across the country. I do not believe that it is the Government’s intention to reduce hospitals’ ability to drive down waiting lists, yet that will be the impact of these changes and the consequent higher charges.

Amendment 1 seeks to exclude hospitals from the higher threshold multiplier to prevent a further burden of taxation falling on the NHS. The Minister will, I am sure, want to comment on the fact that, while NHS hospitals will see a huge rise in their rates, about one-third of private hospitals have charitable relief of 80% of their rates. He will no doubt say in his reply that it is not possible to allow exclusions to the Government’s scheme, but that just demonstrates that the whole business rates system is no longer fit for purpose, because the rateable values on which it depends are inevitably higher in cities and urban areas, while distribution warehouses benefit in rateable terms from being out of town. The whole system is topsy-turvy.

The Government’s express purpose was to tax those fulfilment warehouses more to help save our high streets—in their words. They failed to say that this will also clobber our NHS. That will not do. Hospitals must be excluded from the higher multiplier. I beg to move.

[Baroness Scott of Bybrook (Con)]

My Lords, first, I declare my interest as a vice-president of the Local Government Association. The amendments in the name of the noble Baroness, Lady Pinnock, seek to retain the standard multiplier for healthcare hereditaments. They address the unintended consequences of the Bill, as we have heard very strongly from the noble Baroness.

As mentioned in Committee, I understand the desire for a reformed business rate system and, indeed, if such a system were proposed, I would be more inclined to support it. But despite the Government’s manifesto commitment to level the playing field between the high street and the online giants, the Bill does not deliver on that. I understand that this is only the first step in the Government’s plans, as I am sure the Minister will point out, but it is not a step in the right direction.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Khan of Burnley) (Lab)]

My Lords, these amendments seek to remove healthcare hereditaments, including medical and dental schools, from the higher multiplier.

Throughout the passage of the Bill, the Government have explained the importance of taking a sector-agnostic approach with regard to the application of the higher multiplier. This is the fairest approach to ensure that the Government can sustainably fund the lower multipliers. In Committee I set out that of the 16,780 properties at or above the £500,000 threshold, based on the current rating list, only 350 are in the health sub-sector. Of these, 290 are NHS hospitals and only 30 are doctors’ surgeries or health centres. These numbers are rounded to the nearest 10.

This Government fully support the healthcare sector. Our great National Health Service, which has delivered universal healthcare for nearly 80 years, is something the Government are extremely proud of. We recognise that the NHS needs support and reform to ensure that it can continue to deliver world-class healthcare to all for the next 80 years and beyond. The noble Baroness may feel that I do not appreciate her point, but I assure her that I do. This Government want to create an environment in which the healthcare sector can thrive. As I have set out, the impact on this sector is limited and where it does apply, much falls to the public sector.

The noble Baroness will be aware that phase 2 of the spending review is currently under way, following the fixing of the spending envelope at the Autumn Budget. As part of setting departmental budgets at the spending review, the Government will consider the full range of priorities and pressures facing departments. This includes considering any impact of the higher multiplier.

I am sure noble Lords appreciate that I cannot pre-empt the outcome of the spending review, but I reassure them that the impact of the higher multiplier on the public sector is an active consideration. The immunity of the Crown from business rates was removed 25 years ago and since then all of the public sector has been on the same footing as business. The Government are not going to reverse this position, which was intended to drive fairness between the public and private sectors and the most efficient use of property in the public sector. For these reasons, I cannot accept the noble Baroness’s amendment and I respectfully ask her to withdraw it.

[Baroness Pinnock (LD)]

My Lords, I thank the Minister for his response, which, I am afraid, was much as predicted. I really do not know how a Labour Minister can say that the Government are agnostic about our NHS. You can be agnostic in approach, but surely not about the NHS. The Minister said that they are taking an agnostic approach to the sector, but that includes agreeing that our NHS will be clobbered by even higher rates bills than it has now, while some private hospitals have the 80% charitable relief. That will not create the level playing field that he talked about.

On these Benches, we are determined to support our NHS to enable it to push down waiting lists. Given that the Minister was unable to give me any hope that there will be a change of heart, I beg leave to test the opinion of the House.

--- Later in debate ---

The numbers themselves explain the unfairness of the current system. I am talking not about the £500,000 threshold that is being proposed but about the simple rates burden. All I seek is an inquiry; it would report in a year and would not be lost in the long grass.

[Baroness Pinnock (LD)]

My Lords, the noble Earl, Lord Lytton, is right to challenge the Government’s intentions in relation to saving our high street. The Government are in a quandary: retail, hospitality and leisure businesses have continued to benefit from Covid-related relief, which is currently at a rate of 75% but will fall to 40% from April and not exist in the following year. The challenge for the Government then will be to square the circle of the commitments made.

The slogan of saving the high street depends on ensuring that businesses at the heart of the high street are not priced out of financial viability by large changes in business rates—hence the Bill. However, the evidence from Wales and Scotland—which have and have used the right to alter the Covid rate relief in a previous year—is that the effect of the reduction in Covid relief was a rise in business closures above what would normally be anticipated.

As will be debated in the next group of amendments, large retail stores are an essential ingredient for a thriving shopping centre in a city, large town or retail park. It is already clear that retailers are moving more and more of their business online, partly in response to consumers but also as a consequence of the rising costs of bricks and mortar retailing—our high street that the Government intend to save. The high street will not be saved unless these larger stores are classified with all other RHL properties and charged the lower multiplier. A failure to do so simply underlines the Government’s inability to appreciate the rising taxation burden imposed on high street retailers.

Amendment 32 in the name of the noble Lord, Lord Thurlow, seeks to push the Government into wider reform of the system to fulfil the promises made about charging more to fulfilment warehouses—the Amazons of this world—to help level the playing field with traditional retailers. As the Minister knows, I have regularly provided evidence of the iniquity—I should have said inequity, but it is probably iniquity as well—of the business rating system, which has failed to be radically changed in the face of the online revolution. If the noble Lord, Lord Thurlow, wishes to test the opinion of the House on his proposals to push the Government into making deeper and lasting reform of the property taxation issue, we on these Benches will support him.

[Lord Jamieson (Con)]

My Lords, I declare my interest as a councillor in Central Bedfordshire. I will speak to the amendments in the names of the noble Earl, Lord Lytton, and the noble Lord, Lord Thurlow.

Amendments 2 and 11 are broad amendments that seek to retain the standard multiplier for all retail, hospitality and leisure hereditaments, rather than them facing higher business taxes. The noble Earl, Lord Lytton, is right to raise the issue of higher taxes on RHL businesses above the £500,000 threshold, as the Government’s stated policy intentions are not reflected in the reality of this Bill. We share similar concerns about the impact that this will have on high streets, which is why my noble friend Lady Scott of Bybrook has tabled an amendment to protect anchor stores and I have tabled an amendment on the cliff-edge effects of the £500,000 threshold.

Amendment 32 in the name of the noble Lord, Lord Thurlow, seeks to introduce a review of the introduction of a specific use class that targets businesses that operate solely out of fulfilment warehouses—the Amazon tax. The Bill does not deliver on the Government’s manifesto commitment to ensure that online giants are paying their fair share of business rates. Indeed, we expected this Amazon tax to be introduced through this Bill, and it is disappointing that the Government have not delivered anything close to such a reform in this legislation. As such, we will support the amendment from the noble Lord, Lord Thurlow, should he choose to press it.

--- Later in debate ---

[Baroness Pinnock (LD)]

Before the Minister sits down, at the beginning of his response to the amendment moved by the noble Earl, Lord Lytton, he said that there would be a permanent business rates cut for RHL businesses. Yet, the House of Commons Library briefing states that the British Property Federation said in written evidence to the Public Bill Committee that there would be an increase in total business rates liability of £2.6 billion. Can the Minister explain that?

[Lord Khan of Burnley (Lab)]

My Lords, yes, I can explain that, because we are talking in particular about the retail, hospitality and leisure sector. The point is very clear. We cannot have a system where every year businesses do not know what their business rates bill is going to be. Over the years—I accept that there has been Covid—we have not had a long-term approach to this. This is part of a wider reform of the whole business rates system. I am sure that the noble Baroness will understand that having a multiyear approach to this will provide more certainty and stability for businesses, which will know what their bills will be. The higher £500,000 threshold properties, which amount to 1%, are supporting the retail, hospitality and leisure sector, in particular, across the country.

--- Later in debate ---

It may well be that something will be done about this in the Spring Statement, but at the moment, in the absence of an industrial strategy, it is important that the Government maintain the capacity to opt to apply a lower multiplier for manufacturing industries. There was a recent report by Barclays Bank which concluded that the words “Made in Britain” were worth an additional £3.5 billion to UK exporters. I hope very much that the Minister may be able to reassure us that the Government are aware of the stresses on the manufacturing sector, that the drop in confidence that has occurred since the autumn needs to be reversed and that one way of doing that is to give the Government the power to keep open the option of applying a lower multiplier in business rates. That is the purpose of Amendment 4, and I hope we will hear some positive words from the Minister when he comes to reply.

[Baroness Pinnock (LD)]

My noble friend Lord Shipley has just made a powerful case for the disaggregation of manufacturing from the standard multiplier and for those businesses to benefit from the lower multiplier. The economic case is a strong one, as my noble friend has just said, and the Government’s go-for-growth strategy, especially in the context of world events, will fundamentally depend on British manufacturing. More encouragement needs to be provided to the sector to invest and to innovate, and a government decision to reduce the rate burden will be one such indicator that the Government are showing they are determined to support those businesses that produce the wealth on which our public services rely.

The noble Baroness, Lady Scott of Bybrook, has led this group with the case for the Government to take especial notice of so-called anchor stores, on which the viability, as she rightly argues, of our high street absolutely depends. I urge the Government to accept Amendment 4, in my name and that of my noble friend Lord Fox, to show that the importance of manufacturing will be recognised. If the Minister seeks to ignore that argument, then we on this side will test the opinion of the House.

[Lord Thurlow (CB)]

My Lords, I add my support to the important comments from the noble Baroness, Lady Scott of Bybrook. The importance of anchors cannot be overemphasised, particularly in smaller towns. We all know a shopping centre near where we live, and not a brick of development for that shopping centre would have been laid if it was not for a pre-let to an anchor.

It is important to explain that. They do not just create the footfall for the retailers generally—which of course they do—but they also catalyse the funding for the developer to build it. They are the anchor. They are the golden goose for the high street. Taxing them more simply risks losing them. The damage to society locally in losing them will be difficult to restore, and social cohesion will suffer. I strongly support the amendment from the noble Baroness, Lady Scott, and will support it if it goes to the vote.

--- Later in debate ---

Moved by

[Baroness Pinnock]

4: Clause 3, page 3, line 31, after “hospitality” insert “, manufacturing”
Member’s explanatory statement
This amendment seeks to include the manufacturing industry in the types of business that can qualify for the lower multiplier.

[Baroness Pinnock (LD)]

My Lords, manufacturing is at the heart of what this country does. We need to support it, and we can through the Bill by reducing the burden of business rates on those businesses. I therefore beg to test the opinion of the House.

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[Lord Jamieson (Con)]

My Lords, in moving Amendment 5, which is in the name of my noble friend Lady Scott, I shall speak to Amendments 18 and 20, which are consequential. The amendments seek to introduce an increase in the threshold for the higher multiple, in line with the average aggregate increase in rateable values in the three years preceding the re-evaluation of the business rate multipliers. I am concerned that the Bill will introduce a stealth tax that will result in more and more businesses being subject to the higher multiple, if the higher multiple is fixed at £500,000 and does not increase with rateable values.

I listened to the points raised by the Minister in Committee and adjusted the amendment so that it considers the re-evaluation that will take place in 2029. Although the Minister claims that an alternative system will be introduced, this is uncertain. As such, it makes sense to introduce protection in the Bill.

Amendments 7, 15 and 19 seek to introduce into the Bill the definition provided for the RHL relief, which seems unnecessary given that the definition already exists in government guidance.

I look forward to the response from the Minister on the issues that have been raised. I beg to move.

[Baroness Pinnock (LD)]

My Lords, Amendment 7 and consequential Amendments 15, 19 and 22 probe the Government on the definition of retail, hospitality and leisure businesses. This is absolutely critical because those businesses currently receive 75% relief, which will fall to 40% in April, and the relief will be non-existent by April 2026. The Bill introduces the lower multiplier by way of reducing the impact of the removal of the Covid relief. It then becomes crucial for businesses to know which multiplier will apply to them.

The House of Commons Library’s detailed briefing stated that there is currently

“no definition in law of ‘retail, hospitality and leisure’ properties”.

It would be really helpful if the Minister confirmed that this essential definition will be determined in secondary legislation.

Throughout deliberations on the Bill, the Minister has repeated that RHL properties in the new regime are identical to those that received Covid relief. If that is so, surely the legal definition must already exist and can be shared in our debates on this group of amendments.

During the debate in the other place, Daisy Cooper MP wanted to know whether large RHL businesses that currently have a £110,000 cap on the Covid relief received will have that cap removed and benefit from the lower multiplier. If that is the case and they get the cap on their relief removed but also benefit from the lower multiplier, it will mean that smaller businesses end up subsidising the larger chain stores within this definition of RHL. Again, I feel sure that it is not the Government’s intention to let small shops subsidise larger ones. If that is not the case, can the Minister explain what is going on?

Can the Minister confirm that the new rating system being introduced in April 2026 will be fixed for three years, as he stated in earlier debates on the Bill, and that the small business relief will be uplifted in line with inflation? That is very important for small shops in villages and small towns. Currently, rateable values of less than £12,500 receive 100% business rates relief, and then a sliding scale exists. It is therefore critical that the rateable values are revised upwards to reflect property values. Otherwise, ever fewer businesses will qualify—fiscal drag for business rates. This is also the argument made by the noble Baroness, Lady Scott, in relation to the higher threshold being introduced. Failure to increase the £500,000 threshold results in pulling more businesses into the higher rate.

In the end, as we have heard from across the House this afternoon, tinkering with the system fails to address the fundamental problem that businesses are not what they were 100 or even 20 years ago, and property taxation must change to create a fairer, more equitable approach that does not penalise traditional businesses, which end up providing a larger portion of the tax take than is justified.

[Lord Khan of Burnley (Lab)]

My Lords, the amendments in this group touch on a few different areas in the Bill, so I will speak to each topic in turn.

Amendments 5, 18 and 20 in the name of the noble Baroness, Lady Scott of Bybrook, would require the £500,000 threshold for the higher multiplier to be increased at the 2029 revaluation in line with the average aggregate change in rateable value for the preceding three years. In Committee we similarly discussed whether the £500,000 threshold should be uprated over time. The amendments we considered in Committee would have uprated the threshold in line with annual inflation, and I explained—and I think the Committee recognised—why that was not appropriate.

Amendments 5, 18 and 20 are closer to the more appropriate considerations for changes to the threshold. As I said in Committee, the 2029 revaluation will be the next logical moment to consider whether the £500,000 threshold remains appropriate for the new higher multiplier, and at that time we will consider whether the threshold in the regulations continues to be appropriate. I can assure the noble Baroness, Lady Scott, that the total change in the rateable value at the 2029 revaluation will form part of those considerations. But it will not be, and should not be, the only consideration.

As well as the movement in all rateable values, we may want to look at the movement in rateable value for the cohort of properties near or above the threshold. We will need to consider in 2029 the level of continued support that we should provide to qualifying RHL and, in turn, the revenue needed from the higher multiplier to fund that support. That should form part of the considerations of the threshold on the higher multiplier.

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Moved by

[Baroness Pinnock]

6: Clause 3, page 3, line 35, after “hospitality” insert “, manufacturing”
Member's explanatory statement
This amendment seeks to include the manufacturing industry in the types of business that can qualify for the lower multiplier.

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Moved by

[Baroness Pinnock]

9: Clause 3, page 3, line 37, at end insert—
“(9D) In sub-paragraph (9B), “qualifying healthcare hereditament” includes hospitals, medical and dental schools, and any other healthcare settings as may be prescribed by the Treasury in regulations.”;” Member's explanatory statement
This amendment, together with Baroness Pinnock’s amendments to page 3, line 26, page 4, line 6, and page 4, line 17 would have the effect of retaining the standard multiplier for hospitals, medical and dental schools, or any other healthcare setting to be determined by regulations.

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Moved by

[Baroness Pinnock]

13: Clause 3, page 4, line 11, after “hospitality” insert “, manufacturing”
Member's explanatory statement
This amendment seeks to include the manufacturing industry in the types of business that can qualify for the lower multiplier.

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Moved by

[Baroness Pinnock]

17: Clause 3, page 4, line 17, at end insert—
“(6C) In sub-paragraph (6A), “qualifying healthcare hereditament” includes hospitals, medical and dental schools, and any other healthcare settings as may be prescribed by the Treasury in regulations.”;” Member's explanatory statement
This amendment, together with Baroness Pinnock’s amendments to page 3, line 26, page 3, line 37, and page 4, line 6, would have the effect of retaining the standard multiplier for hospitals, medical and dental schools, or any other healthcare setting to be determined by regulations.