Planning and Infrastructure Bill

Debate between Baroness Pinnock and Earl of Lytton

Monday 27th October 2025 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, the purpose of tabling this amendment is twofold. First, it is to shine a beacon of light on a building scandal that has recently fallen out of the national spotlight. Secondly, it is to urge the Government to use this Bill to exert further pressure on those who caused the Grenfell Tower tragedy, where, I remind the House, 72 people lost their lives.

This amendment is not about pointing the finger of blame at this or past Governments. It is about seeking to put more pressure on those who created the conditions in which people died and which many leaseholders now have to endure, consequent on building safety failure.

What are the facts? The MHCLG estimates—I note that there is no current definitive figure—that between 5,900 and 9,000 buildings over 11 metres have unsafe cladding. This means that over a quarter of a million individual flats and perhaps nearly half a million people are affected, and that is just for those blocks over 11 metres, which are the subject of the Building Safety Act.

According to government figures for August this year, 1,927 blocks have had their remediation completed and a further 750 have started, but that leaves many thousands of leaseholders in limbo. I accept that the Government have attempted to improve this position with the remediation acceleration plan, alongside a promise for a remediation Bill. Can the Minister tell the House when that Bill is likely to be introduced?

The action plan commits to completing all remediation of blocks over 11 metres by 2029. That is a full 12 years after the Grenfell Tower fire. Meanwhile, leaseholders are paying the price for a situation that in no part is of their making. They are paying for it in extortionate insurance bills, in ever-rising service charges, and in knowing that they have no way out as their flats do not sell. For some, this has had very tragic consequences. The mother of one of those who ended their life as a direct result of this enormously stressful situation is sitting in the Gallery today and listening to this debate.

This Bill is an opportunity further to address the building safety scandal by putting more pressure on those who created these dangerous living conditions. Amendment 87FD in my name and co-signed by the noble Earl, Lord Lytton, seeks to require that construction companies that have signed up to the responsible actors scheme agree to the full remediation of all buildings—that includes those under 11 metres—before they are able to proceed with further major developments. This must be achieved at no cost to leaseholders. For those living in blocks of under 11 metres, currently the costs fall on them, despite their not having created the building scandal in any way. The major housebuilders are well able to afford to pay for the crisis they created, with annual operating profits being in the high hundreds of millions of pounds.

The noble Lord Young of Cookham wished to speak in support of this amendment, but, unfortunately, he is currently speaking in Grand Committee. He has asked me to say that he is in complete support of the amendment and will vote in the Lobby in support of it if a vote is called. I look forward to the Minister’s response, but if I am not satisfied that more can be extracted from those who created the crisis that is putting lives at risk, I will test the opinion of the House. I beg to move.

[The Earl of Lytton (CB)]

My Lords, it is a pleasure to support the amendment tabled by the noble Baroness, Lady Pinnock, to which I have added my name. We have both spent many years trying to persuade the Government that a clearer and more comprehensive solution is needed to protect everyone affected by the building safety crisis. Noble Lords will know of my professional insights into this matter as a chartered surveyor and of my previous attempts to get fair treatment for innocent homeowners. .

I continue to receive mail from home owners, small investors, property managers and conveyancers who are utterly dismayed at the complexity, uncertainty and capricious nature of the funding under government schemes, which involve matters of building height, cladding combustibility and unseen and previously unknowable compartmentation issues, with funding applying differentially to various classes of ownership or being dependent on the freeholder’s assets, plus identification of the person responsible and whether that person has effective agency in relation to remediation. In addition, there are two parallel standards of remediation at work.

Some noble Lords will recall that during the deliberations on the Building Safety Bill, I convened a briefing for Peers. We were addressed by the late Amanda Walker, to whom the noble Baroness, Lady Pinnock, was, I think, making reference. She told us how her life and world had been turned upside down. Her experience fits entirely with what others have told me of a living hell of unsellable property, unaffordable interim safety costs, insurance hikes and unknowable liabilities going forward—in short, what they thought was a safe and secure home being turned into a financial prison—and of the stress, ruined lives and total inequality of the exclusions from protection.

I joined Amanda’s mother and brother earlier today in a meeting with Minister Samantha Dixon. She gave the impression of listening very carefully to what we said. Mrs Walker’s recent email, which I paraphrase, says this: “My precious daughter was a very ardent campaigner on behalf of thousands of leaseholders who suffered because of loopholes in the Building Safety Act. This amendment”—she is referring to the amendment before us now—“will not help her but may help many others. The anxiety levels in so many people were painful to watch, and in my view ruined many lives”.

As the Minister knows, around 1.7 million leaseholders do not have full or even, in some cases, partial protection from the costs of remediating unsafe buildings. Those living in buildings below 11 metres have no protection at all, as the noble Baroness pointed out. Enfranchised leaseholders and those owning more than three properties are liable for any non-cladding remediation costs. Other leaseholders may have to contribute up to £15,000 to cover non-cladding costs—depending on the wealth of their freeholder, if you please. All these people are completely innocent of the causes that led to defects in their building, not just cladding but basic disregard of the building regulations in force at the time of construction.

The assumption is that lower rise buildings are safe because it is easier to mitigate risks, to escape from them and for fire and rescue services to attend to emergencies, but we do not actually know that they are safe. The proportionate standard under PAS 9980, which is the remediation standard frequently used, admits that spread of fire may be more rapid given the greater prevalence of combustible materials in the construction, and the capacity of many construction products to generate impenetrable choking smoke when burning, impeding escape. And who pays for any mitigation? Ultimately, it is the leaseholders.

According to the National Fire Chiefs Council, the current Building Safety Act’s three-tier approach—fully protected, partial or capped protection, and totally unprotected— is delaying remediation and leaving leaseholders in limbo. That funding is fragmented, and occupiers are left in unsafe buildings or are among the growing number, currently totalling more than 14,000, of those mandatorily evacuated, sometimes having to leave very modern buildings. The National Audit Office has found that the PAS 9980 risk-based approach to remediation is a cause of delays as different stakeholders argue over what constitutes “proportionate” remediation and “tolerable” risk, both of which terms appear in that document. Some 52 flat developers have signed up to the responsible actors scheme. Their remediation responsibility is to this proportionate standard only—never mind failure to build to the relevant building standards applicable at the time of construction.

Markets need transparency, and the Government need to be upfront about the general quality of buildings and building regulation compliance over past 30 years. It has long been an offence not to comply with building regulations. Market sentiment depends on clarity, but beyond the scope of the Government’s remediation portfolio, it is unclear what the reality actually is. So long as this doubt sloshes around the market, the insurance and lending sectors and, indeed, purchaser keenness, will remain febrile. All these may predispose a wider malaise the longer this persists, particularly in the lending markets, where the impact of new solvency regulations means that such uncertainties will have to be factored into securitisation risks, loan book management and consumer costs.

For evidence of the effects today, I point to flagging new flat construction, rising costs, schemes being mothballed and softening sales markets. Wagging fingers at insurers will not get rid of risk awareness and sentiment. Once you understand that something is a risk, it is there for ever. While I understand why the Government might not want to garner a lot of non-compliance data, if, despite consumers’ and the markets’ need to know, they choose not to do so, what I set out is the inevitable outcome, with implications for urban redevelopment and densification, homebuilding targets and, ultimately, stable communities.

This amendment would sweep up all building types, all tenures, and both cladding and non-cladding defects. It would tighten standards and encompass product manufacturers. Any planning delays under the amendment would be no more than the minimum necessary to process regulations immediately on Royal Assent, and I believe very few projects would be held up in practice. If the Government agree the principle that innocent people should not foot the bill for bad building practices or even for preserving the Government’s own policy objectives, they need at least to indicate to the noble Baroness, Lady Pinnock, that they propose to take this forward with serious intent. This amendment would give the Secretary of State the tools to do this and to end the two-tier remediation standard, the basic inequity and uncertainty of the current protections, and the market disruption that has accompanied them.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Baroness Pinnock and Earl of Lytton

3rd reading
Monday 24th March 2025 Lords Chamber

[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.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Baroness Pinnock and Earl of Lytton

Committee stage
Monday 24th February 2025 Grand Committee

[Baroness Pinnock (LD)]

My Lords, at this point in our first day in Committee, I ought to remind the Committee of my relevant interests as a councillor—we are reliant on business rates for what we do—and as a vice-president of the Local Government Association. I also remind the Committee, given the further amendment that I have, that I am a vice-chair of the University of Huddersfield’s council.

I very much thank the noble Lord, Lord Thurlow, and the noble Earl, Lord Lytton, for speaking to this group of amendments. The thrust of the amendment in the name of the noble Lord, Lord Thurlow, is to remove the higher multiplier. Without really understanding the combination of potential higher multipliers and the loss of what we could call the Covid business relief, because we do not have an impact assessment from the Government, it is difficult to understand the financial impact on businesses of both those changes. I will urge the Minister at every opportunity to provide for the Committee the financial impact on businesses; otherwise, we are debating in the dark a bit because we do not know exactly what the totality of the impact will be on different sectors of the business community.

One of the comments from the noble Earl, Lord Lytton, concerned the lack of targeting of specific businesses in the whole range of proposals in this Bill. It is really difficult to see how the current valuation assessments will result in a fair share of property taxation. I say “fair share” because, in his response to the first group of amendments, the Minister talked about the purpose of this Bill—I quote him—as being to create a fairer system. As we will come to understand in our debates on later groups, this Bill fails to do that because it fails to target businesses except on the basis of valuation. The purpose is ostensibly—I think it was the noble Baroness, Lady Scott, who called it the “Amazon tax”—to try to extract a fairer share of property taxation from distribution warehouses.

At this point, I shall quote what I have, I think, quoted before. The Valuation Office Agency has a figure for an Amazon warehouse near where I live in Yorkshire of £25 per square metre, whereas, in my own small town, a local shop is valued at £250 per square metre. That is at the heart of the problem, which this Bill does not address; it is fundamental. What is absolutely essential to getting a fairer system is a total rethink about property taxation.

Things have changed enormously since the non-domestic business rates regime was introduced. There are now significant out-of-town developments in warehouse distribution which did not exist 20 years ago, and large out-of-town retail parks, which did not exist 25 or 30 years ago. However, they do now, and they are benefiting from the way property is valued by the criteria set by the Valuation Office Agency, and they are benefiting at the expense of high streets. If the Government are certain in their aim to provide a fairer system for our high streets, then absolutely essential is this fundamental change to the way properties are valued, so that taxation can be fairly shared between out-of-town distribution centres, which currently benefit from very low rental values, as opposed to city and town centres, where rental values are high and landlords want to keep them high, because that is important for their income.

We will achieve nothing in this Bill unless that basis of the system is addressed. I agree with the thrust of what is being said, though I do not see how you can let people off a high multiplier if you introduce a lower one without losing that taxation take. I also agree with the final point that both the noble Lord, Lord Thurlow, and the noble Earl, Lord Lytton, made, which is that this arbitrary £500,000 figure as a cut-off between the lower and higher rates will lead to appeals. If I ran a business which had a rateable value of £510,000, I know what I would do: I would do my best to make it come up for £499,000.

I look forward to what the Minister has to say in response, but I hope it will be thoughtful.

[The Earl of Lytton (CB)]

My Lords, if I may, I will intervene a second time, first with an apology because I should have properly declared my interests as a chartered surveyor and a member of the Rating Surveyors’ Association and of the Institute of Revenues, Rating & Valuation.

That apart, I will follow up on what the noble Baroness, Lady Pinnock, has said. First, we are of course dealing with either the rental or the imputed rental value of properties. I get that point that this is reflecting much lower figures per square foot for some giant distribution centre somewhere upcountry, as opposed to a high-value shop in a sought-after city centre location. However, if that is not the right basis, then we cannot go on slavishly following that. We then have to start thinking about how we split the basis, so that the rental value forms one part of the thing only and something else happens to top the thing up. It cannot be beyond the wit of man to do that, and it cannot be beyond the wit of the Labour Party in opposition to have thought of something when it said in its manifesto commitment that it would replace business rates and

“level the playing field between the high street and online giants”—

and I think I have that verbatim.

More recently, the description of the Bill has been a “rebalancing”. The other way you deal with the whole question of imbalances is to look at the scope of the tax base. The Government have looked at the scope of the tax base; they have decided to take certain private schools out of the exemption and that has increased the tax base. However, that tax base is not retained at all in the business rates pool on a fiscal-neutrality wicket; no, it will be split between government and local authorities for other purposes altogether, so there is a net attrition from the system by that means. What could have been an improvement of the tax base resulting in a reduction across the board will not be there. We have to look carefully at what Governments and the Treasury think they are using business rates for. If they are to go on, bluntly, flogging this poor donkey to death, then things might well start unravelling quite quickly within the timeframe of a valuation list.

--- Later in debate ---

[The Earl of Lytton (CB)]

My Lords, it may save time later if I rise to make a comment in the context of these amendments. I can quite see that there is an objection in principle to some of what is being put forward here, because of the Treasury need to predict the yield, if it is going to be able to explain to the Chancellor what announcement has got to be made in the Autumn Budget with regard to the multipliers.

That said, this raises the question of the complication that has arisen from the fact that, by virtue of the Bill, the discretion to define RHL properties, which has rested hitherto with billing authorities, will be taken away under the Bill and, as we have heard, the definition will be set centrally. How will central government make the relevant decisions in applying this as between a small seaside town at one end and a bustling urban metropolis at the other? Will it be by reference to the road name—high street or non-high street, depending on whether you want to dance on that glass pinhead—its predominant use or position vis-à-vis the town itself, never mind the range of uses as between different geographical locations?

I am entirely unsure what the outcome of this shift will be, but I am pretty certain that it will be pretty crude and, to local eyes, fairly insensitive of locational differences. That is because it will have to make one rule that applies across everything, from Bognor to West Bromwich—that is what is going to happen. There is a great deal to be said for some sort of discretion being in the hands of local government, which understands the pitch. That said, I do not know how easy it would be to achieve that, because valuation list analysis does not give you that information; it gives you an address, a postcode, a use category and a rateable value, but it does not go further than that, so there is actually quite a lot of qualitative information that we need before we can actually deal with that.

There are other aspects to this whole question of local government billing authority choice, which I will go into when I get to the group starting with Amendment 5, but I thought it was worth making that comment at this particular juncture.

[Baroness Pinnock (LD)]

My Lords, I thank the noble Lords, Lord Jamieson—also known as the noble Baroness, Lady Scott—and Lord Thurlow, for the amendments in this group. I have always in principle supported more powers and influence for local authorities. What I have always said should go without saying, but I repeat it.

However, I am nervous about the amendments from the noble Baroness, which seek to enable local authorities to have discretion over whether the higher multiplier should impact on businesses in their area. This is because, if you look at the Valuation Office Agency’s billing lists, you find that the vast majority—I have not worked out the percentage—of businesses in the £500,000-plus bracket are based in the south-east and London. Therefore, the income from the application of the higher multiplier in those areas is essential for the totality of the business rate take, which is then distributed to fund local authorities across the country. Areas of the country where valuations are much lower absolutely depend on the business rates raised from the south-east and London, and that has been the situation for ever.

If I were a London or south-east authority, I would see anything to encourage businesses as an opportunity and I would use that discretion, but it would be at the expense of councils in the north. Those such as mine in Yorkshire and the Minister’s over the Pennines—I dare not say the county—would suffer as a consequence, because the totality of the business rate take would reduce and the distribution of funding, which is vital for local services, would be less. If the noble Baroness comes up with an amendment which counters that, I could support it, because I support more power and discretion to local authorities. However, as we have a national system, we cannot have little local changes to the benefit of places that currently are fairly well funded or have better income already.

On the amendment from the noble Lord, Lord Thurlow, on defining retail, hospitality and leisure properties, there are later groups which try to get at the detail of this, but it seems to me—maybe the Minister can tell me whether I am wrong or right—that this whole business is associated with the removal of the Covid rate reliefs. Currently I think they are at 75%, to be reduced to 40% and then to zero. It will be quite a big hit to RHL properties to find themselves suddenly facing the totality of their business rate bill.

It seems to me that the essence of the Bill is removing that with one hand in order to provide some relief with the other hand; that is what we have got here. I think that is why the Government are in difficulty in helping us as a Committee to understand the purpose of this. It seems to me that it is that rather than trying to extract more from distribution warehouses et cetera, which we see from the lists provided are not many—of the, I think, 16,000 properties in the £500,000-plus bracket, only about 1,400 or 1,500 are large distribution warehouses. So, my plea is again: let us have an understanding of what this is about. If we had an impact assessment, we would be better able to understand it. I will keep repeating it, so perhaps before we get to Report the Minister will have extracted and published an impact assessment so we can make the judgments that we need to make.