Levelling-up and Regeneration Bill

Lord Etherton Excerpts

Committee stage
Monday 20th March 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, my Amendment 168B seeks to ensure that, in the case of a district council for which there is a county council, all the income from the supplements under Section 11B or new Section 11C of the Local Government Finance Act 1992 would be retained by the district council as it is the housing authority. The amendment allows the district council also to decide to allocate some of the supplement to any of its major precepting authorities if it decides to do so. I will not go into much detail about this amendment; I think what it is trying to achieve is pretty self-explanatory.

Previous days in Committee have included a lot of discussion about the important role that district councils play in delivering services to our communities. Noble Lords have talked about the fact that, in many parts of the Bill, they feel that district councils are being shut out. They will not have access to the same opportunities within the proposed combined county authorities, and they are not then going to get the support they need to continue to deliver services, including housing and planning. We believe that if the district council is the housing authority, it should be able to keep all the income from these sections of the Local Government Finance Act. It should also be in the district council’s gift to decide how that income should be used. In the previous debate, the noble Earl, Lord Lytton, and the noble Lord, Lord Foster of Bath, talked about local authorities being able to decide how funds are spent in other areas. Again, we absolutely agree that this is important.

My Amendment 169 would give the owner of a dilapidated property up to a year after acquiring the property to refurbish it before additional council tax rates are incurred. We touched in the previous group on dilapidated properties but, I suggest, from a different perspective. This is an issue that came to me when I was a Member of Parliament in the other place. Constituents would come to me because they were having financial difficulties in being able to update a dilapidated property, which sometimes they had inherited, because of the amount of council tax they were being clobbered with—to be blunt—which made it much more difficult for them to have the funds they needed to do up the property in good time. It was taking them a long time to do it up.

We know that bringing old, dilapidated buildings back into use will benefit the whole community. However, as I said, it can take a long time, depending on what is needed—for example, if there are problems with damp or you need a new roof. It can take a long time for properties to be restored to a good condition. My Amendment 169 recognises that there can be circumstances in which houses will not be occupied while work needs to be carried out. It is also designed to encourage people to bring homes back to a decent standard without being hampered by having to pay higher council tax rates, which, as I said, can impact on people being able to pay the costs of refurbishment.

The other amendments in this group, Amendment 428 in the name of the noble Baroness, Lady Pinnock—I look forward to her introduction of the proposed new clause—and Amendment 474 in the name of the noble and learned Lord, Lord Etherton, look at the business rates system. Amendment 428 proposes to review it, and Amendment 474 proposes to review it and include consultation to look at how we can bring economic support to businesses, especially in high streets and town centres.

This issue is incredibly important. We know that business rates have had a very negative impact on many of our high streets and town centres, and I am sure we will debate that when we come to the group on high streets later in Committee. Noble Lords know that I feel very strongly that good public consultation and participation for communities is important when we are looking at these kinds of issues. We know that business rates are one of the most important taxes for local government, but they have also been blamed for the struggles of retailers, for the death of the high street and for exacerbating the country’s economic divides.

I suggest that there are three fundamental problems with business rates, which I ask the Minister to take away for further thought and discussion. First, they do not always reflect local economic realities. That became extremely clear during the pandemic, when many businesses struggled to keep going. Secondly, business rates can be far too complex; we do not need them to be that complicated. Thirdly, at the moment they actually disincentivise investment, which is crazy—they should be doing exactly the opposite.

We support these amendments, as we believe that we need a reformed system which will support towns and cities in improving their business environments, raise productivity and boost prosperity.

[Lord Etherton (CB)]

My Lords, I will speak to Amendment 474. I am grateful to the noble Baroness, Lady Pinnock, for allowing me to speak first. We both have the same objective in mind: that there should be a review of non-domestic business rates. The main differences between us are twofold: first, the noble Baroness’s amendment is slightly more prescriptive than mine; secondly, and more importantly, my amendment would provide for a public consultation. Those are the only two differences, really; there is nothing much more than that.

I should declare my interest as the owner of high street investment retail properties, and I am grateful for the support of noble Lords across the House who have signed my amendment. The objective of my amendment is stated in its proposed new clause: to make business rates

“fairer to businesses and to sustain economic activity and growth, especially in high streets and town centres.”

The Bill is an entirely appropriate vehicle for such a provision, since one if its major concerns is that there are empty high street retail properties and failed retail businesses both on the high street and in town centres.

I acknowledge the steps taken in the Autumn Statement to ease some of the economic burden of business rates but, if we want flourishing high streets, we need to look at the system as a whole and not rely on ad hoc changes. Those who invest in retail properties, whether they run small businesses there or otherwise, will want to know what their liabilities are—not what might happen in future—either to raise or reduce business rates or to introduce new ones. This is the one outgoing that is not negotiable. You can negotiate your employees’ wages; you can negotiate the rent; you can go to one of a number of power and energy suppliers; however, you cannot negotiate the rates.

The Government said by way of a manifesto commitment that they would reduce the overall burden of business rates. In fact, the Office for Budget Responsibility reported last year that the Government are

“forecasting that income from business rates will rise to nearly £36bn by 2027/28 (from £28.5bn in 2022/23)”—

a very significant increase that is quite contrary to that manifesto commitment.

There are numerous reasons why it is appropriate to have a review of—and, I would say, a public consultation on—non-domestic rates. Let me mention a few. The uniform business rate multiplier, which is used to calculate rate bills, is running much higher than its historical level, which was 34p; currently, it is 51p or 49.9p for small businesses. Consideration also needs to be given to the empty property rates relief; there is a question as to whether the six-month empty property rates holiday should be extended from the warehouse and industrial sectors to include retail and offices.

Then, there is the question of how often revaluations should take place for the purpose of fixing the level of rates, the suggestion being that it should be yearly. Another question is what is or is not rateable in relation to plant machinery. Finally—these are only a few of the considerations that need to be addressed—there is the question of the appeals system, which is too lengthy, not transparent and not accessible. Those are reasons why it seems essential to me that, if we are to have full and flourishing businesses and retail properties on the high street, we need to look at this one non-negotiable expense, which is running at an historical high, notwithstanding, as I said, the ad hoc reliefs granted in the Autumn Statement.

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

I think I explained to the noble Baroness that we went out for extensive review—the issue is that we and local services need business rates—and there was no consensus on how they might be changed and made different, such that a similar amount of money would be coming in so that local areas could provide services. We tried but came to no consensus.

[Lord Etherton (CB)]

The Minister referred to, and I think the Government are relying upon, a 2021 review. What was the public’s involvement in that review?

Cabinet Manual: Revision (Constitution Committee Report)

Lord Etherton Excerpts

Friday 16th December 2022 Lords Chamber

[Lord Etherton (CB)]

I am very grateful for this 11th-hour opportunity to participate in this debate, initiated by the noble Baroness, Lady Drake. Much of considerable constitutional importance has occurred since the publication of the Cabinet Manual in October 2011, as has been referred to by many of those who have spoken today. It is therefore reassuring to know that there will be a revision to the code before the end of this Parliament. I am not a member of any committee that is likely to be consulted on any revision, so I wish to take this opportunity briefly to mention three matters that are not presently stated in the manual but which I suggest ought to be addressed in any revision.

The first two arise out of the two Gina Miller cases relating to Brexit. The second of those cases, concerning the lawfulness of the Prorogation of Parliament, made it clear that it is for the courts to determine whether in principle any exercise of a particular prerogative power by the Executive is or is not subject to the supervisory jurisdiction of the courts. It also confirmed that it is for the court to decide the limits of a lawful exercise of prerogative power.

The next point was anticipated by the noble Viscount, Lord Stansgate. In the first of the Miller cases, concerning the triggering of Article 50 initiating the departure of the UK from the EU, it was illustrated that it is for the courts to decide whether it is the Executive or Parliament which can exercise the prerogative power.

What those cases did not examine in any detail, but which marks the limits of outside control of parliamentary affairs and so is critical to the functioning of our parliamentary democracy, is the operation and effect of Article 9 of the Bill of Rights 1689. As your Lordships will be aware, that is the provision which stipulates that

“the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any … place out of Parliament.”

This too should be mentioned in any revision of the code.

Finally, any revision of the code ought to provide the opportunity for describing what is good or bad legislation in our parliamentary democracy, including, for example, skeleton legislation and clauses. This is a well-canvassed and often-repeated concern of this House, most fully addressed, in the previous Session, in the 20th report of the Secondary Legislation Scrutiny Committee and the 12th Report of the Delegated Powers and Regulatory Reform Committee. Revision of the code would provide an excellent opportunity to reach a consensus on this issue between government and Parliament.