Wales: Replacement Funding

Lord Greenhalgh Excerpts

Wednesday 3rd March 2021 Lords Chamber

[Lord German]

To ask Her Majesty’s Government how the money replacing funding previously provided by the European Union in Wales will be administered.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

The UK shared prosperity fund will help to level up and create opportunity across the United Kingdom in places most in need and for people who face labour market barriers. The UK-wide investment framework will be published later this year. In addition, to help local areas prepare over 2021 and 2022 for the introduction of the UK shared prosperity fund, we will provide £220 million of additional UK funding to support our communities to pilot programmes and new approaches.

[Lord German (LD) [V]]

The Minister told the House last year that Wales would receive at least the same sums of money that it had previously received from the EU—that is, money that was administered by the Welsh Government to meet priorities they set in devolved areas. Can the Minister tell us what portion of this £400 million-plus annual funding will be administered by the Welsh Government? Will the UK Government make a portion biddable across the UK? Can the Minister reassure the House that they will not use these funds to cut across devolved areas of competence without the approval of the Welsh Government?

[Lord Greenhalgh (Con)]

My Lords, the UK Government have a responsibility to support the economic health of people, businesses and communities across the entirety of our United Kingdom. The Government have committed that the devolved Administrations will be represented on the governance structure for the UK shared prosperity fund.

[Lord Morris of Aberavon (Lab) [V]]

My Lords, will the Minister confirm that the Government are committed to

“at least matching current EU receipts for Wales”?

Since farming is an important way of life for so many in Wales and agriculture is a devolved matter, will the Minister give a specific assurance that funding decisions will be decided solely by the Welsh Government in this field?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I am afraid I cannot give that assurance but we will continue to ramp up funding so that the total UK-wide funding will at least match EU receipts of, on average, around £1.5 billion per year.

[Baroness Finlay of Llandaff (CB) [V]]

During the passage of the Internal Market Bill in both Houses, Ministers committed to collaborate closely with the devolved Administrations, not simply to have them represented. Will the previous £375 million of EU structural funds now be built into the shared prosperity fund allocation to Wales, and will the Welsh Government’s framework for regional investment, which has been developed through extensive local consultation, be respected?

[Lord Greenhalgh (Con)]

My Lords, I note the points made by the noble Baroness but I think we need to wait for the UK investment framework that underpins the shared prosperity fund for those sorts of details.

[Baroness Wilcox of Newport (Lab) [V]]

The Welsh Counsel General’s requests to meet UK Ministers leading the shared prosperity fund have unfortunately been met with silence. Meanwhile, the Welsh Government have engaged with hundreds of key stakeholders, as the noble Baroness, Lady Finlay, just said, on the development of successor arrangements. The framework for regional investment in Wales was published three months ago and it sets out high-level strategy for achieving prosperity and inclusive Wales-wide economic interventions. Will the Government agree to meet Welsh Ministers to use their consultative plan for moving investment into Wales, or is the lack of engagement with the Welsh Government a further example of this Government’s undermining of the devolution settlement?

[Lord Greenhalgh (Con)]

My Lords, we are committed to working with the devolved Administrations. In fact, there have been 26 engagement events, attracting more than 500 representatives, all about the UK shared prosperity fund. Sixteen of those events took place in the devolved Administrations and I am sure Ministers will be meeting representatives of the devolved Administrations in due course.

[Baroness Randerson (LD) [V]]

My Lords, in 2019 the Conservative manifesto promised that the shared prosperity fund would, at a minimum, match the size of EU structural funds in each nation. In the last six years, Wales received £400 million a year in ESI funds. That is £123 per person on average. I ask the Minister again—to give him the opportunity to confirm today—to say that the Government will be keeping their promise to Wales and that this funding will be specifically identifiable over and above current UK sources of funding.

[Lord Greenhalgh (Con)]

My Lords, again, we need to see the publication of the investment framework but I can commit to saying that the overall envelope of funding will be at least the amount that we receive from EU structural funds of around £1.5 billion per year.

[Lord Hain (Lab) [V]]

My Lords, can the Minister confirm that, far from increasing funding through the Barnett formula to devolved Governments as was promised, money is being spent on priorities set in Whitehall, not Cardiff; that official-level meetings have involved no sharing of any information about Whitehall’s plans for the pilot shared prosperity fund in Wales; and that Welsh Ministers have not had a single ministerial-level meeting on this subject since the Government took office? Is this not yet another London power grab and betrayal of devolution?

[Lord Greenhalgh (Con)]

My Lords, we need to recognise the improvements of moving away from EU structural funds. This will allow for quicker delivery of funding, better targeting and better alignment with domestic priorities and will certainly be less bureaucratic and burdensome than the current EU structural funds arrangements.

[Lord Wigley (PC) [V]]

My Lords, the Minister will recall that the EU scheme for structural funds comprised two parts: the money that came from Brussels and match funding from the Treasury that had to be additional to normal spending programmes. Will he confirm that the UK Treasury will henceforward make available, additional to the Barnett-based block, two sums of money to be wholly administered by the Welsh Government, one corresponding to the EU allocated funding and the other to the match funding based on the additionality principle?

[Lord Greenhalgh (Con)]

My Lords, I cannot make specific funding commitments. However, I point out that as well as the UK shared prosperity fund we have talked about the additional funding of £220 million. There is also the levelling-up fund, which provides further opportunities for funding in the devolved Administrations. All of this will go to ensure that we deliver the levelling-up agenda between and within areas.

[Lord Berkeley of Knighton (CB) [V]]

My Lords, I associate myself with the comments of the two previous speakers. I want to ask the Minister a specific question. When Brexit was being discussed, we heard of European companies which might be shutting down or withdrawing from Wales, particularly south Wales. Have the Government made any assessment of whether that has come to pass and should not money go to those areas that might be very deprived now?

[Lord Greenhalgh (Con)]

My Lords, the whole purpose of the UK levelling-up fund of some £4.8 billion is precisely to provide the funding to underpin the regeneration required to make areas in Wales as competitive as possible. Of course, we keep changes in the industrial landscape under close scrutiny.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, the partnership between local communities, the devolved Governments and other local authorities in England inside the UK and the European Commission was a real strength of the old structural funds. They had their problems but they also had those strengths. Why have the Government moved away from that model? There was a real opportunity here to set a structural fund-type analysis for the whole of the UK and priorities that could be shared within this shared prosperity fund, and then to implement it in practice with the devolved Governments and regional and local authorities throughout the UK. That partnership will be missing from this new model and simply sticking a UK flag on a fund then distributed straight to Scotland or Wales will not solve the problems the United Kingdom has in terms of respect in Scotland and Wales right now.

[Lord Greenhalgh (Con)]

My Lords, I underpin the commitment to collaborate very closely with the devolved Administrations. That is why they will be an important part of the governance structure of this new fund. The new fund gives us opportunities to improve on the funding approach used by the EU structural fund, not least because there are now only two layers of government that need to work closely together.

[Baroness Jolly (LD) [V]]

Will the Minister explain how EU funding for Cornwall will be replaced, given that Cornwall would have received around £600 million over the next seven years? Cornwall is still some way from being as prosperous as our south-west neighbours. When does the Minister expect the shared prosperity fund to be designed and funds made available for growth and investment?

[Lord Greenhalgh (Con)]

What applies to Cornwall will apply to other areas. Further details on the operation of the fund will be set out in the UK-wide investment framework for the UK shared prosperity fund that will be published in 2021. The funding profile for the UK shared prosperity fund will form part of the next spending review.

[The Senior Deputy Speaker (Lord McFall of Alcluith)]

My Lords, the time allowed for this Question has elapsed.

Rough Sleeping

Lord Greenhalgh Excerpts

Tuesday 2nd March 2021 Lords Chamber

[Baroness Grender (LD) [V]]

My Lords, I thank the noble Lord, Lord Greenhalgh, for bringing us the Statement. There is no doubt that Everyone In last spring was a significant achievement. Louise Casey, now the noble Baroness, Lady Casey, wrote in her email at the start of the pandemic, after her first week in MHCLG:

“I don’t care what’s happening; I don’t care what’s going on, you’ve got to get everybody in.”


Rough sleeping was treated as an urgent public health issue, resource was prioritised and brought forward, and central and local government worked in tandem with all the charities and the hotel sector and lined up safe accommodation. This was without question a success. But, as so many witnesses to the APPG for ending homelessness made clear, these numbers are never static. Homelessness, like a river, expands and grows. Substantial boulders are the only thing that stop it at source, and those boulders start with social and truly affordable housing.

Will the Minister explain why social housing build last year was only 5,716 homes, far below both Shelter’s annual target and the National Housing Federation’s goal of 145,000 social homes per year? Tomorrow in the Budget we are expecting to see a significant subsidy, not to social housing but to first-time buyers, who will be encouraged to borrow 20% of the purchase price. Will the Minister say where that money is likely to go? What is the possibility that it will end up in the profit margins of the large developers, many of which donate regularly to the Conservative Party? To prevent an increase in the number of people sleeping rough, rapid access to secure, long-term accommodation is vital. This period, following the achievement of Everyone In, is a unique opportunity to do just that and never return to the levels that were way too high just before this pandemic.

The target date of the manifesto commitment—as was mentioned by the noble Lord, Lord Kennedy—is fast approaching, and policies need to be in place now. So surely—as the noble Lord also said—it is time to commit to a rollout of Housing First across England, instead of continuing with the pilots. The scale of current provision is 2,000 places, which falls far too short of the 16,450 places needed that were identified by the charities Crisis and Homeless Link. Can the Minister explain what is preventing the Government rolling out these successful pilots now?

It is welcome news that local authority guidance is encouraging registration of people sleeping rough with GPs, but why are the Government not following the success of some London boroughs, together with Liverpool and Oldham, which are using current JCVI guidance to vaccinate homeless people, in order to mitigate health inequalities? Some local authorities are unclear about this; will the Minister commit to clarifiying the issue? Even at the height of Everyone In some local authorities turned homeless people away. Can the Minister explain why? Does his department know why there were 2,600 people, or more, sleeping rough in October, and how many of them had no recourse to public funds?

The Statement rightly refers to research in the Lancet but not to the wider arguments used. It was clear that what was critical was the absolute refusal to resort to emergency shelters at all. So why are the Government considering using them? Large cities in the US continue to use emergency shelters, to huge detrimental effect. If social distancing is still advised next autumn, should emergency shelters not be ruled out? Can the Minister explain, in detail, in what circumstances they will be used?

The Statement refers to many of the underlying reasons for rough sleeping but fails to mention the precarious position of so many in the private rented sector. Why is that? While it is welcome that the pause on evictions has been extended, that has not stopped every stage of the process. Will the Minister acknowledge that, during the winter lockdown, 500 people were evicted from their homes and that last month 445 were either in arrears or served with eviction notices? Does the Minister agree that if the landlords’ associations and charities have united to ask for assistance, in the form of grants to tenants to keep roofs over their heads, this should be a priority to prevent homelessness?

As we continue to see the economic impact on people’s incomes, it is worrying that there is no longer-term strategy from the Government to ensure that people will be able to keep a roof over their heads. We are expecting unemployment to rise by this summer. The Government have frozen housing benefits once again. Can the Minister give reassurances that the Government are looking at ways to support people to prevent homelessness, including by helping them to avoid eviction due to arrears? Finally, is there any news on the long-awaited end to the use of Section 21, which has such an impact on vulnerable tenants?

There are many paths to homelessness. I sincerely hope that this period has been a pause and we can move forward from here. However, unless some of the problems in areas which give rise to homelessness—such as the private rented sector—are anticipated and stopped in their tracks, we will continue to see rises in homelessness.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, the Oral Statement relates to rough sleeping. The figures are very clear: we have seen a 37% reduction in rough sleeping—a huge reduction. There has been a reduction of 43% since the Prime Minister took office in 2019. The 2,688 statistic that was referenced by the noble Lord, Lord Kennedy, in his opening remarks, is down from 4,751 in 2017. This Government retain the ambition to end rough sleeping. I point out, too, that subsequent analysis, in December and January, shows continued reductions in the levels of rough sleeping.

One of the comments made by the noble Baroness, Lady Grender, is not correct: the Everyone In programme continues and by January had helped 37,000 people, with over 11,000 in emergency accommodation and 26,000 moved into longer-term accommodation. The programme continues to operate, along with subsequent programmes and the Protect Plus programme.

It is important to address the comments of the noble Lord, Lord Kennedy, on funding. The commitment on homelessness and rough sleeping in the 2021 budget was £700 million, and that will increase next year—since we had a single-year budget commitment—by a further £50 million, to £750 million. Significantly, within that £750 million is a commitment to a block grant of £310 million for homelessness prevention. That grant is to ensure that there are no further pressures, and to support people at risk of homelessness.

The noble Baroness, Lady Grender, mentioned the Government’s record on social housing. Social housing is underpinned by the multi-billion pound affordable homes grant, which has had record funding. We continue to be committed to build all forms of affordable housing, of all tenures, including social housing.

The Housing First pilot, which was referred to by the noble Baroness, Lady Grender, is a world-class project. It was pioneered in Finland and we are piloting it to get the policy right. It continues to be piloted in three areas—the West Midlands, Greater Manchester and the Liverpool City Region. It is important to use the findings of the evaluation, and other experiences with pilots, to inform our next steps, and we are commissioning a consortium led by the ICF to conduct a comprehensive evaluation of the programme. When you do something new like this, it is important to test what you want to expand and expand what you test, rather than hurriedly implement something and get it wrong.

We remain committed to removing no-fault evictions; that will happen as soon as parliamentary time allows, as I have said in previous answers. We recognise the underlying problems of people on our streets, and that we need to continue to address them. This Government, however, have made huge, unprecedented strides in reducing rough sleeping, and we continue to see that in the latest information that we have published.

[The Deputy Speaker (Baroness Fookes) (Con)]

We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers. I am tempted to repeat that last sentence, but I will not.

[Lord Cormack (Con)]

My Lords, I congratulate the Government on what has been achieved. I am particularly glad that they are trying to ensure that every rough sleeper has a GP. Can my noble friend tell the House what percentage are now registered with GPs? Furthermore, has any any study been conducted into how many are driven into homelessness by drugs and how many are driven to drugs by homelessness?

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend for showing the complexity that underpins rough sleeping. We know that 82% of rough sleepers have a mental health vulnerability; 83% have a physical health need; and 60% have substance misuse needs. We do not necessarily know the interrelationship between those problems. Getting rough sleepers vaccinated is very much part of the Protect Plus programme, which is backed by £10 million to support and urge local authorities to play their part in getting rough sleepers—whether on the streets or in emergency accommodation —vaccinated when it is their time in the queue. We also continue to work closely with NHS England and Public Health England to ensure that this vulnerable cohort of people gets vaccinated at the earliest opportunity.

[Lord Harries of Pentregarth (CB) [V]]

The Government are to be congratulated on the initiatives they have taken over rough sleeping during the Covid epidemic, and particularly for their success during the first lockdown. But the key question, of course, is whether there is the right policy, with adequate backing, to ensure that this is a permanent change. There were worrying signs before the pandemic that there were many more first-time rough sleepers; there was a report from Southwark recently, for example, that there are still new people coming on to the streets, with the number of applications from the homeless rising. As the noble Lord, Lord Kennedy, emphasised, the problem is still there before our eyes. Of course, this has a great deal to do with the loss of jobs and the shortage of long-term accommodation, so how do the Government intend to ensure that during the difficult months ahead, we do not slip back into the old, pre-Covid situation?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I point to the commitment through an entire Parliament of building 6,000 new homes for rough sleepers, which is backed by over £400 million of funding. We hope to see the reductions that we have seen on the streets of London, which were in line with the national reduction of 37%, continue.

[Lord Campbell-Savours (Lab) [V]]

On the issue of Covid vaccination policy for rough sleepers, is it not true that they are not treated nationally as a priority group for vaccination and that we have a postcode lottery in operation? Some areas treat them as a priority, others do not, yet they are a particularly vulnerable and difficult group. What action are the Government taking to organise a national framework for rough sleeper priority vaccination? I was concerned when I heard the Minister say, “When it is their turn in the queue”—they should be at the very front of the queue.

[Lord Greenhalgh (Con)]

My Lords, the JCVI has set the overall framework for vaccination, and there is, by definition, a queue in terms of relative vulnerability and when people are called to be vaccinated. Of course, as part of that it is important that rough sleepers are registered with their GP. Therefore, we have been working closely with local authorities—backed up by £10 million of funding—to ensure that rough sleepers are registered with GPs so that they get the vaccination when it is offered.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, we should not be too self-congratulatory about what has happened, bearing in mind that the number of people sleeping rough on our streets is still more than 50% higher than it was a decade ago. The action around Covid has shown that taking direct action can get people off the streets. It is notable that most of those coming on to the streets are not returning but are coming on for the first time. Charities such as Crisis are warning of an imminent peak, however, as special measures, such as housing benefit increases and the temporary ban on evictions, end. Does the Minister agree that there is a real risk of a new peak in rough sleeping? What specific action will the Government take to replace these schemes, which clearly cannot continue for ever, to address this issue?

[Lord Greenhalgh (Con)]

My Lords, I recognise the risk of a cliff edge given the level of support from the Government during the Covid-19 pandemic. An important plank of the support for people at risk of homelessness is the uplift in the local housing allowance, and there has been a commitment to maintain that at the same level in cash terms. In addition, we have seen increases in universal credit and working tax credit of up to £1,040 for the year. Of course, it is a matter for the Chancellor to decide how that continues as he makes his comments in the Budget.

[Lord Robathan (Con)]

My Lords, it is very good news that rough sleeping is in decline, and I congratulate the Government and all those concerned on that success. There is one difficult cohort that is not covered in the Statement: those coming temporarily from abroad, often to beg or for other purposes, who, for instance, set up filthy encampments in Park Lane which we can all see. I understand that up to 50% of the rough sleepers in central London are in that category, and they are described as having “no recourse to public funds”. Do Her Majesty’s Government have any plans to address that issue?

[Lord Greenhalgh (Con)]

My Lords, my noble friend is right that we see more people who are either EU or non-EU foreign nationals on the streets of London. We encourage local authorities, including those in London, to connect those people with family and friends. We can also provide legal support, as well as helping them into work or training where appropriate, so there is flexibility for local authorities to do that for this group of people.

[Lord Browne of Ladyton (Lab) [V]]

My Lords, I acknowledge the progress of Everyone In, but the debate in the other place exposed some very disturbing factors, such as the Minister admitting wide variances across the country of the delivery of rough sleeping and homelessness services and, shockingly, that many homeless people eventually end up in poor-quality, publicly funded supported housing. What regulatory or other plans do the Government have to level up provision for rough sleepers and homeless people?

[Lord Greenhalgh (Con)]

My Lords, it is a fairly consistent national picture. I went through the data with a team as preparation for this; in every region in England we are seeing a very significant drop in rough sleeping, and they are very large in the south-east and London. It is only in the north-east, which has relatively low numbers of rough sleepers and where the figure is up by five rough sleepers according to the data, that we have some concern around not seeing a reduction. But we will continue to push the policies that are working in those areas and ensure that we encourage local authorities and others to adopt those in areas where it is proving harder to do so.

[Lord Best (CB) [V]]

My Lords, the excellent work done in response to Covid in housing those living on the streets followed the implementation from 2018 of the Homelessness Reduction Act, a Private Member’s Bill from Bob Blackman MP which I had the honour of piloting through your Lordships’ House. This was beginning to work well in preventing homelessness and rough sleeping. In congratulating the Minister on the several new initiatives to assist those sleeping rough, can I ask whether he is satisfied that sufficient resources are now available to all local authorities to fully implement the Homelessness Reduction Act to prevent people becoming homeless in the first place?

[Lord Greenhalgh (Con)]

My Lords, I congratulate the noble Lord on supporting my honourable friend Bob Blackman in the other place. It is an important piece of legislation, and prevention is an incredibly important priority to ensure that we do not see more people sleeping rough on our streets. I remind noble Lords that we are seeing an increase in the budget for next year to £750 million, and £310 million is for the Homelessness Prevention Grant to do precisely what the noble Lord encourages local authorities to focus on: preventing homelessness.

[Lord Truscott (Non-Afl) [V]]

My Lords, as someone who once worked for a charity supporting homeless people, I welcome the reduction in the numbers of those sleeping rough. Rough sleeping is a blight on any civilised society and must be wholly eradicated, and I am sure that the Minister would agree. But apart from no-fault evictions and existing benefits, how do Her Majesty’s Government propose to prevent an upsurge in homelessness resulting from the end of the furlough scheme and rising unemployment—particularly among private renters, as mentioned by a number of noble Lords?

[Lord Greenhalgh (Con)]

My Lords, I cannot really comment on any additional measures. It is a matter for the Chancellor to set out the protection that we will be able to afford renters, while recognising the considerable amount that we have already done during this pandemic.

[Baroness Blackstone (Ind Lab)]

My Lords, the Government’s commitment to end all rough sleeping is admirable. However, if this is to be achieved, they need to do much more in terms of both the immediate response to the numbers continuing to sleep on the streets and of solving the long-term causes. In relation to immediate actions, will the Government commit now to a national rollout of Housing First as soon as the pilots have been reviewed? I understand what the Minister said about the need for the pilots to be evaluated, but the fact that they are in existence must mean that the Government intend to take them further where they are working. I would hope that Housing First will have its funding increased so that around 2,000 places that are being helped by the scheme can be greatly increased to cover the numbers needing support. In the longer term, will they make a commitment that no one will be released from prison without adequate housing to go to?

[Lord Greenhalgh (Con)]

My Lords, all I can say in addition to my response to earlier questions is that the Government are committed to expanding Housing First. That commitment was made in our latest manifesto, but it is important to take on board the lessons from the three pilots.

[Lord Young of Cookham (Con)]

My Lords, like others, I welcome the Government’s commitment to end rough sleeping by the end of this Parliament and the progress being made towards that. But the Statement says, of those sleeping rough:

“Many of the individuals will have been offered accommodation but will not have chosen to accept it, for a wide range of reasons.”


How, then, will the commitment be delivered?

[Lord Greenhalgh (Con)]

My Lords, I commend my noble friend on his tireless work that started in the early 1990s with the launch of the Rough Sleepers Initiative. Recognising that the moral mission of ending rough sleeping will be difficult shows the need to work in harness not only with our health partners and others in local authorities, but also with the community voluntary sector to deal with the underlying problems. The Housing First principle is first to find secure accommodation, then to deal with issues so that the person involved does not return to the streets.

[Baroness Uddin (Non-Afl) [V]]

My Lords, homelessness and sleeping on the street is never done by choice. It is about our societal and institutional failures. Some 250,000 people, including 130,000 children, are regarded as being homeless and significant numbers of them are sleeping on the streets. They may have no recourse to public funds or be fleeing domestic violence. Among those sleeping rough, there are serious concerns about mental health and substance misuse, for which they do not have any access to services. Last year, almost 1,000 people perished on the streets.

Through the outstanding leadership of the noble Baroness, Lady Casey, the Government have made incredible advances and provided necessary services, which is to be commended. Does the noble Lord accept that banning evictions and regulating the private rented sector, along with supporting local councils to meet and manage housing needs and additional support services, are the correct solutions? They would have the most impact and be the most genuine way of eradicating sleeping on the streets and homelessness.

[Lord Greenhalgh (Con)]

My Lords, the Government have already made a commitment to ending Section 21 no-fault evictions. I shall return to my previous answer and point out that we have seen a further decrease in the number of people aged 25 or under who have been sleeping rough this year. It is important, if we want to end rough sleeping, that we see a decrease in numbers among our young people.

[Baroness Massey of Darwen (Lab) [V]]

My Lords, to follow on from what the Minister said, the voluntary sector and local authorities are expressing concern about the number of young people who are rough sleepers. Can he say what is the ratio of homeless young people and what will be done to prevent them becoming homeless by, for example, providing support for conflict in families and for mental health problems, both of which have become increasingly important during Covid?

[Lord Greenhalgh (Con)]

My Lords, we have put in place bespoke support for local authorities through our homelessness advice and support team, which includes dedicated youth homelessness advisers who will inform the response to support young people. In addition, we recognise the role played by the community and voluntary sectors play if we are to end rough sleeping. That is why, included in the £6 million-worth of emergency funding, is around £100,000 that has been given to St Basils to ensure that we upskill and fund Youth Voice, which is a training scheme for young homeless people across the country.

[Lord Randall of Uxbridge (Con) [V]]

My Lords, I am very encouraged to hear about the improvements in the rough sleeping figures and I sincerely hope that they can be maintained. Perhaps my noble friend could say what is being done and can be done to relieve the plight of those living rough in rural areas, who so often seem to be forgotten.

[Lord Greenhalgh (Con)]

My Lords, I point out that in my noble friend’s constituency, the level of rough sleeping has dropped by 90%, which is one of the largest decreases in the country. On the rural figures, of course we work very carefully to ensure that the snapshot includes both rural and urban numbers. The regional figures would seem to indicate an across-the-board reduction in rough sleeping and, in particular, very steep reductions in some of our major cities.

[Lord Dubs (Lab) [V]]

My Lords, the Government’s ambition to end rough sleeping is of course to be welcomed, provided that there is progress towards achieving it. I want to ask the Minister about two specific groups. One has been referred to by my noble friend Lady Blackstone. She asked what is being done about ex-offenders who find themselves sleeping rough. Can the Minister say a little more about that group? Can he also say something more about members of the Armed Forces? If they have served our country as well as they have, we have a responsibility to ensure that in the end they do not sleep rough when they are discharged. We owe them a better future than that.

[Lord Greenhalgh (Con)]

My Lords, part of the ministerial working group is looking at the issue of rough sleepers in London who are former members of the Armed Forces. I pay tribute to the work of my honourable friend in the other place, Johnny Mercer. The key is to work with local authorities to identify those people so that we can get support services to them. The support services for our Armed Forces as well as for ex-offenders are in place; it is a question of ensuring that we identify those people so that we can wrap the service support around them.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I declare my position as a vice-president of the Local Government Association. In the past hour, London has become the largest city in the world to call for a trial of universal basic income. An unconditional income sufficient to meet basic needs would be one way to ensure that no one ends up sleeping on the streets —that conditionality of benefits or insecurity of employment would not lead to eviction. As the noble Lord, Lord Truscott, said earlier, today’s figures report a fall in rough sleeping, but the future of rising unpayable debt, in particular among private tenants, looks grim. The Government keep saying that they will not introduce a national universal basic income, but will they support London and the 14 other local authorities that have voted for trials in their communities?

[Lord Greenhalgh (Con)]

My Lords, it is indeed blue-sky thinking to guarantee someone an income that is paid by the state. I point out that in the pandemic we have seen the national debt increase substantially to the level of our economic output for a year, which is some £2.2 trillion. In that environment, it is very difficult to make these kinds of spending commitments, and I will certainly leave something like that to the Chancellor.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, all the questions have been taken. Before we move on to the next business, I suggest that we take a short breather to allow people to move in and out of the Chamber.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Greenhalgh Excerpts

Report stage & Lords Hansard
Monday 1st March 2021 Lords Chamber

[Baroness Pinnock (LD) [V]]

My Lords, I draw the House’s attention to my relevant interests as vice-president of the Local Government Association and a member of Kirklees Council. The noble Lord, Lord Kennedy, has tabled a comprehensive amendment, which addresses issues of concern that were raised and debated in Committee. The Minister was unable to provide sufficient reassurances at that stage, hence today’s amendment, which has the support of the Liberal Democrats, as already clearly stated by my noble friends Lord Stunell and Lady Bakewell.

The Bill as it stands simply changes the date of the assessment of the revaluation to 1 April of this year and to delay the publication of the rateable values until 31 December in the year prior to its implementation. As was debated in Committee, these simple changes may have a profound effect on businesses, the prosperity of our high streets, local government finances and on the appeals waiting lists.

First, I will take the effect on local government finance. During Committee, the Minister sought to provide assurances about the financial impact on council income, and I thank him for that. However, there is a wider point of the double whammy on town centre businesses of the impact of Covid lockdowns and the competitive advantages enjoyed by online business. This is likely to mean that town centres will have several empty shops, which will undoubtedly have a knock-on effect on the remaining businesses.

The Government have some support for town centres, but much is limited and scattered around the country. It does not provide sustained help. Part of the answer lies with the radical reform of the whole business rate system. Will the Minister provide the House with a draft timetable for the introduction of a reformed approach, which, as several noble Lords have stated, has been promised for several years.

My noble friend Lady Bakewell has spoken from her experience of the impact of long appeal waiting lists on businesses and council services. As the Minister will know, councils have to set aside considerable sums for the refund of any possible successful appeal. Will he tell the House the total amount set aside by local authorities for this purpose? If he is not able to do so today, will he agree to set out the information in a letter to those taking part in today’s debate? Is the Minister able to consider an alternative to setting aside large sums for potential refunds that clearly make an impact on the day to day services—as described by my noble friend Lady Bakewell—that a council is able to provide?

The current system of business rating is failing, in that it considerably disadvantages those who have a physical presence as opposed to those purely providing an online retail offer. I am not opposed to online shopping but urge the Government to appreciate the value to communities of physical shopping. As the various lockdowns have shown us, there is an intrinsic value to individuals of physical shopping. One simple benefit is that of meeting another person, in the shop or serving at the till. For too many people living on their own, this may be the one chance in the day that they have to speak to someone.

There is also the benefit to communities as a whole. Local high streets provide a sense of belonging to a place. The importance of place-based services has shone through during the pandemic. Local shops and services are part of that sense of place and play a significant role in supporting well-being. We lose it at our peril.

That leads me to repeat the example I gave in Committee of a small shop in the town centre of Cleckheaton, which pays at the rate of £250 per square metre on its 30 square metres of shopping space. In contrast, a large online-only retailer, with an out-of-town warehouse occupying 40,000 square metres, also in Yorkshire, pays just £45 per square metre. If that online retailer were to pay at the same rate as the small town-centre shop, it would be paying a rates bill of £5 million. That would solve a lot of local government finance issues. The retail playing field is hugely skewed to the benefit of online retailers. The Government must act with urgency to address this imbalance and demonstrate that they really do support prosperous local high streets.

The further problem for the Government and Valuation Office Agency is the timing of the valuation assessment. My noble friend Lord Stunell said today that the changes that the Bill will bring may be too late to save more retailers from closing their high street shops. He suggested bringing forward the implementation date to put it in line with the proposals of Non-Domestic Rating (Public Lavatories) Bill, which was discussed last week.

The noble Lord, Lord Thurlow, drew attention in Committee and today to the timing of valuations, when so much of the high street has been closed for several months. Equally, it is not of benefit to town-centre retailers that the current valuation will be that on which their rates bills will be based for the next two challenging years. The Government should address this issue with urgency, but there is no evidence that they are doing so. I look forward to the Minister’s responses on a number of these issues and hope that they are more positive than those we received in Committee.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, I am grateful to the noble Lord, Lord Kennedy, for tabling this amendment, which allows us to return to the important matter of how the revaluation will impact on various parts of our economy. I entirely understand that the House wants to consider the impact of the next revaluation on sectors such as the high street and small business. I point out to the noble Lord that the £1 billion future high streets fund is not insubstantial and forms part of the £3.6 billion towns fund. It is an important part of helping our high streets to bounce back. Also, as has been mentioned by noble Lords, there has been the business rates relief scheme throughout the Covid pandemic, which has cost in the region of £10 billion. It is for the Chancellor to signal how that will continue in his Budget later this week.

A number of noble Lords, including the noble Baroness, Lady Pinnock, referenced the shift over many years, even before the pandemic, towards online and away from place-based shopping on our high streets. It is a matter for the Chancellor, who is carrying out a fundamental review of business rates, to consider how to address that. The interim report is due on 23 March and the review will conclude in the autumn.

Businesses have been calling for frequent revaluations and we had planned for the next one to take effect this year. It would have been based on rental values as at 1 April 2019. In the difficult circumstances in which we now find ourselves, this was clearly unsatisfactory, as those new rateable values would not have shown the impact of the pandemic. Instead, the Bill will move the date on which the next revaluation takes effect back to 2023. This will allow us to use rental values as of 1 April 2021, which will better reflect the impact of the pandemic.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I am very happy to support the noble Lord, Lord Addington, in his amendment. Both he and the noble Lord, Lord Moynihan, made a very powerful case when we were in Committee and they have made an equally powerful case today. I am very happy to support them.

As we heard from the noble Lord, Lord Moynihan, we want to be healthier; we have to get people doing more physical activity, because it will have great effects on their health. That is a good thing as people will live longer and have fewer problems with disease, and that will have a knock-on effect on our health service. That is the most important thing behind all this—getting people to be more active and healthier. The Government are currently running a major campaign, quite rightly, which you see on television, at bus stops and everywhere. I fully support that.

It is also important to ensure that local amateur clubs doing a variety of activities in their communities actually get people doing things. Where I live in south London, there is the Francis Drake Bowls Club—I often go past and see lots of people playing on the bowls green. There is also Lewisham Borough Football Club, an amateur club, and the athletics club that takes part on the track in Ladywell Fields. Those are the things that local people can do to become more active and physical, and if we can support them through the rating system, we should.

As the noble Lord, Lord Moynihan, said, all the amendment is asking for is a biennial report. The amendment is much more generous than I would have been as I wanted one every 12 months. If the Government accept this amendment, they will have to do everything that is in it anyway because they need to have good policy, and good policy needs facts and proper information.

I hope that the noble Lord will tear up his speaking notes to resist this and say, “I agree”. I look forward to hearing his response.

[Lord Greenhalgh (Con)]

My Lords, in my rush to respond to the noble Lord, Lord Kennedy, on the first amendment, I forgot to declare my relevant commercial and residential property interests as set out in the register, so I do so now.

I thank the noble Lord, Lord Addington, and my noble friend Lord Moynihan for their suggestion that I tear up my speaking notes and do what the amendment says. I will seek to reassure them that we have a real commitment to community and grass-roots sports. In that spirit I will refer to a number of things that the Government are doing. My family, friends and I all benefit from community sports and it is right that we do all we can to support community and grass-roots sport, as Members have highlighted.

As I explained in my response to the previous amendment, we will not know the effect of the revaluation on ratepayers for some time and certainly not within six months of the passing of this Bill. The same points apply to this amendment. However, I appreciate that the noble Lord and others want to understand how the revaluation will affect amateur sports clubs. It may therefore assist the noble Lord if I explain how these clubs are valued for business rates—I will try to make the incomprehensible comprehensible.



First, the Valuation Office Agency must, by law, value a property having regard to its current use. This means, for example, that when valuing the site of an amateur cricket club the valuation officer must have regard to its value to the cricket club and not its value to a developer. As you would expect, this important principle means that the rateable value of sports grounds is generally quite low.

The VOA publishes statistics on the rateable value of different categories of properties. The average rateable value in England of sports grounds is £12,000 but the value of many is much less than this and the median rateable value of sports grounds is only £6,000. That equates to a full annual rates bill of about £3,000, which for many will be reduced by the 80% mandatory rate relief. Under those circumstances, many sports clubs will find themselves with a rates bill of as little as £600 per year or £50 per month.

Of course, I appreciate that some clubs will find themselves paying more than this. Business rates reflect the specific circumstances of the property so some clubs, for example with more facilities than others, may find themselves paying more. We also heard in Committee that some clubs may be not eligible for the 80% mandatory relief for community amateur sports clubs. That is a matter specific to the individual clubs but I can understand that some will still have a particular interest in understanding whether their rates bill may change at the 2023 revaluation.

As I have said, we will not know the answer to that until much later in 2022, at the point when all clubs will be able to see their new rateable values. These valuations will be prepared over the next 18 months and, as with all properties, the VOA will first search for evidence of rents paid on sports grounds as a guide to value. As I have explained, to be good evidence these rents will have to reflect the value to the sports club. These rents should not reflect matters such as the development value where, for example, the club happens to be in a prosperous area. To the extent that the rental evidence, where available, shows that values have risen or fallen over the last six years, this will be reflected in rateable values at the 2023 revaluation.

The VOA expects to use rental evidence for most clubs but, whatever the valuation approach adopted for the property, the VOA is clear in its guidance that for non-commercial clubs valuers can also have regard to ability to pay before setting rateable values. The valuer should ask themselves if the rateable value represents the rent that clubs or organisations of the kind which occupy the type of sports ground concerned could reasonably be expected to pay. The VOA’s guidance specifically recognises that where income is generated from the occupation of these grounds, the costs of occupation will be barely covered despite voluntary assistance. Although I am unable to tell the noble Lord how amateur sports clubs will be impacted by the 2023 revaluation, I hope that this background to how they are valued is helpful.

The noble Lord, Lord Addington, has established to the House the vital importance of our community sports clubs. While the value of the 80% mandatory business rates relief to eligible community amateur sports clubs cannot be understated, I recognise the need for the Government to provide support beyond this, particularly throughout the duration of this pandemic. This Government’s commitment to sport is evidenced by the £220 million provided by Sport England to support community sports clubs and exercise centres since March 2020. In addition, the Government have put in place a £300 million sports winter survival package, which has been used to protect the immediate future of major spectator sports over the winter period, and a £100 million support fund for local authority leisure centres. In total, the Treasury estimates that around £1.5 billion of public money has gone into sports in the last year. I hope the House will agree that this constitutes a significant package of support that this Government have made available to sports clubs and exercise facilities of all sizes.

I hope that I have given the House some assurances about both the financial support that the Government are providing to our grass-roots sports sector, and the process and approach which will be taken over the coming months as amateur sports clubs are revalued by the VOA. We will continue to keep in mind the points on how we can support community sports at the grass-roots level. I appreciate the passion from both the noble Lord, Lord Addington, and my noble friend Lord Moynihan, but, reluctantly, I cannot tear up my speaking notes. Therefore, I hope that with these reassurances the noble Lord, Lord Addington, will agree to withdraw his amendment.

Non-Domestic Rating (Public Lavatories) Bill

Lord Greenhalgh Excerpts

Wednesday 24th February 2021 Lords Chamber

[Baroness Pinnock (LD) [V]]

My Lords, I draw the Committee’s attention to my interests as listed in the register: as a member of Kirklees Council and as a vice-president of the Local Government Association.

The amendments in the names of my noble friend Lord Greaves and the noble Lord, Lord Kennedy, to which I have added my name, challenge the scope of the Bill in its restriction to public toilets that are stand-alone and not part of a larger public building, such as a library or community centre. I thank the Minister for the opportunity to discuss these amendments and for the letter that he sent explaining the reasons for confining the scope of the Bill to stand-alone public toilets. However, we have to remember that one consequence of the long period of cuts to local government funding has been that many public toilets have been closed permanently. In my local authority, which serves nearly half a million people, there are now no stand-alone public toilets. The Bill is welcome but it is very much like closing the stable door after the horse has bolted.

These amendments are intended to encourage the Government to appreciate the wider need to increase the availability of public toilets. There is already pressure for some public toilets in public buildings to be closed because of the costs associated with keeping them open, as they are not part of the focused purpose of the building. For example, a public library is having to use scarce funds to keep the public toilets in its building open when there is barely sufficient funding to staff the building. That is the dilemma facing local authorities, certainly in the northern urban areas that I know well.

My noble friend Lord Greaves’s points are well made. Local people regard public toilets within a public building as being the same as stand-alone public toilets. The challenge is explained in the letter that I referred to earlier—the volume of work it would impose on the valuation office—but my noble friend Lord Greaves’s amendment seeks to find a way round this for public toilets that have separate access. I hope that the Minister is able to respond positively to that amendment.

The noble and learned Lord, Lord Hope, is an expert on these matters. He has said that valuation for rating is not just about facts and figures. One example that he provided was the relief given to charities. The Government would do well to take heed of the arguments that the noble and learned Lord made, and that view has been well supported by my noble friend Lady Randerson. As well as making those arguments and supporting my noble friend Lord Greaves’s view, she argued that improved public toilets are more secure and can be more easily kept clean if they are within a public building, rather than being stand-alone.

The Government have a responsibility to ensure adequate availability of publicly funded public toilets. It is a responsibility that has been accepted since the days of the great Victorian public heath reformers. The Bill demonstrates that the Government continue to accept that they have that responsibility. It is not sufficient, in fulfilling this obligation, to make those public toilets that have survived the cull zero rated. The Government must provide the means for local government to increase availability to meet local need. That is what these amendments seek to do and I wholeheartedly support them.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, I am grateful to the noble Lord, Lord Kennedy, for raising the points highlighted by his amendment and for his valuable and knowledgeable contribution to the Second Reading debate, supported by the noble Lord, Lord Lucas, and, with great knowledge, by the noble Baroness, Lady Randerson. I point out that the horse has not bolted entirely. There are nearly 4,000 separately assessed public toilets in England and Wales—3,990 as of 31 March 2020—and therefore this is a very important relief for those properties.

The effect of the first amendment would be to extend the scope of the relief to include publicly owned properties, such as libraries, community centres and other local authority properties, where they contain free-to-use public lavatories. In effect, this would mean that the local authority-owned buildings that contained a non-fee-paying public lavatory would be exempted from paying rates.

It is the Government’s firm view that public bodies, like other ratepayers, should pay rates on the properties they own and occupy, and it is therefore right that the legislation should broadly reflect this principle. The Government’s policy aim, and the purpose of Clause 1, is clear in that it provides a targeted relief to support the provision of public lavatories in specific circumstances. In particular, we want to support facilities that exist where there are unlikely to be any other publicly available toilets, such as those along our coastline or in towns, where removing the additional costs of business rates could make a significant difference to the ability of councils or others to keep the facilities open.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I have nothing really to add: the noble Lord, Lord Greaves, has set out very clearly and carefully what he seeks to get from his amendment. As we have heard, it is a very good probing amendment that gives the noble Lord, Lord Greenhalgh, the opportunity to set out carefully for the Committee what is meant by “or mainly”. As the noble Lord, Lord Greaves, said, this is a good House of Lords way of getting into the detail of the Bill, and I look forward to the Minister’s response. Amendment 7 seeks, of course, to provide a welcome definition of what “mainly” could be construed or interpreted as, giving weight to public use of public lavatories. I will leave it there, and I look forward to the Minister’s explanation.

[Lord Greenhalgh (Con)]

My Lords, I am beginning to learn how the House works, and I appreciate the education; I am sure I will get used to this way of drawing out important information. These amendments probe the current definition of a public lavatory that would qualify for this relief, and seek to amend this definition to capture some of the facilities that the Bill does not currently cover.

The Government have carefully drafted the scope of the Bill, and I am pleased to have the opportunity to set out for the House the rationale behind this decision. Subject to Royal Assent, the relief within this Bill will apply to all hereditaments that

“consist wholly or mainly of public lavatories”.

Amendment 2, tabled by the noble Lord, Lord Greaves, probes the meaning of “mainly” in this provision. The phrase “wholly or mainly” can be found across government legislation and, in particular, exists within that legislation which provides for an 80% business rate discount to properties used

“wholly or mainly for charitable purposes”,

as the noble Lord mentioned. Local authorities are responsible for deciding which properties are eligible for business rate relief, and the use of “mainly” provides for some discretion on their part.

However, I will directly respond to the noble Lord, Lord Greaves, on how this would work in practice. Councils should reflect on all relevant matters, including any relevant case law and guidance, when making these decisions. The use of “mainly” means that an authority may, for example, look at the floor area of a building and see that less than 50% is being used directly as a public lavatory, but it may still feel that it meets the criteria for this relief because the remaining area is used as storage or for other matters of little consequence. That is very similar to the example that the noble Lord gave. The Government consider it right that the Bill provides local authorities with this level of discretion because these are decisions best taken on the ground and on the basis of local knowledge.

The second amendment tabled by the noble Lord, Lord Greaves, follows on from the first and would act to define “mainly” within the Bill in reference to the extent to which a property is used as a public lavatory, rather than for other purposes. I appreciate that the intention of this amendment is to provide for the relief to be available to buildings that do not constitute separately assessed public toilets but that serve that purpose to a large extent. As I set out earlier, an expansion of the relief beyond those toilets that are separately assessed and have already been identified and separately rated would bring with it significant administrative burdens and costs.

In the case of this amendment, local authorities would be required to not just identify qualifying facilities but assess the extent to which the public are using them for different functions. The public use test would be particularly cumbersome because it would go beyond an assessment of a property’s physical elements and would require an analysis of the extent to which these elements are used by the public. The results of such a test could change relatively frequently, and local authorities may need to make the required assessment on a regular basis.

As currently designed, the measure in the Bill does not carry implementation costs disproportionate to the benefits to ratepayers, nor any significant implementation difficulties for local government. As such, we are not in favour of any amendment to this relief which would increase the complexity of its implementation, create unnecessary burdens for local authorities, or indeed create administrative costs disproportionate to the total benefit to ratepayers. However, I would be keen to engage with noble Lords on some of the technical reasons for not expanding the scope of the Bill.

I again thank the noble Lord, Lord Greaves, for his amendments, which probe the design of the relief before the Committee. However, for the reasons that I have set out, I do not consider that the potential benefits of the amendments would outweigh their substantial costs and I hope that the noble Lord will not press them.

[Lord Greaves (LD)]

My Lords, I am grateful to my noble friend Lady Pinnock and the noble Lord, Lord Kennedy, for their support in this little group, and I thank the Minister for agreeing that we will have some discussions about it. He said that this would be to explain to us what we did not understand, and that we would then understand it. That is fine; I am totally in favour of understanding things.

I hope that the Government understand that some of us, at least, are trying to help them with this, to produce a slightly better Bill. We are not trying to wreck it and certainly not trying to place lots of extra administrative burdens on local authorities. We are looking for ways in which common-sense solutions can be found to problems which are going to occur. Inevitably, a town council will say, “Why are we paying rates on this and not that?” They are not experts, and it will cause all sorts of grumpiness. Also, it will not do, in some instances, what the Government are trying to do, which is relieve the burden on councils, particularly town and parish councils which are increasingly taking on public conveniences. So I hope the discussion we have will be two-way

The Minister said two things. First, he said that, in deciding what “mainly” means, councils should reflect on all the “relevant case law”. He then said that he did not want to put administrative and other burdens on councils. It sounds to me as if the Government are already admitting that there are going to be problems. If you have got to go to all the relevant case law and goodness knows what, it inevitably results in the creation of new case law, because it will get to the courts.

The second thing the Minister said was that the rationale was similar to that for charitable 80% relief, and that that is for “wholly or mainly” charitable use. The word “use” is crucial there, because the Bill does not say “use”, but

“consists wholly or mainly of public lavatories.”

One of my amendments talks about use. Can we look at that, and give the rating authorities a steer that it is the use which is important, rather than the other things, as the legislation does for charitable relief? That might just be a way forward.

I hope that the Government will not be stubborn and say that they are not going to change this under any circumstances, if there are ways through some of these problems. On that basis, I beg leave to withdraw at this stage and look forward to discussions with the Minister.

--- Later in debate ---

[Baroness Pinnock (LD) [V]]

My Lords, there are important and relevant issues to explore in Amendments 3 and 10, proposed by the noble Lord, Lord Kennedy, and my noble friend Lord Greaves, respectively. When a financial benefit is to be gained, as there is in this Bill, it inevitably becomes an issue of dispute at some time in the future when some realise that they are not getting rate relief on their provision of public toilets while others are. That is why it is important to explore what the Government are proposing here.

As we have heard from the noble Lords, Lord Greaves and Lord Kennedy, there is a considerable range of public toilet facilities. Some are open only during the day and some not at the weekend; some require payment, and some do not. We need to understand the implications of this variety of provision for the purposes of the Bill. Is it acceptable to make a small charge for a public toilet facility and get the rate relief proposed in this Bill? What will happen if that small charge becomes ever larger? Is it still right, then, that that facility is zero-rated? These two amendments indicate that what may appear to be simple, straightforward changes can have inconsistent consequences once the detail of the implementation is exposed, as it has been so expertly this afternoon. I look forward to hearing the reply from the Minister.

[Lord Greenhalgh (Con)]

My Lords, the noble Lord, Lord Kennedy, wanted to know the evidence that this would cause a burden disproportionate to the level of relief provided. The reality is that, under these proposals, we are not asking local authorities or the Valuation Office Agency to do anything in addition to what they already do. But where we are widening the scope, we are asking local authorities to do something they do not currently do, so by definition that will increase burdens on them and, in some cases, on the Valuation Office Agency.

The effect of the amendments from the noble Lords, Lord Kennedy and Lord Greaves, would be to apply a set of conditions that would need to be satisfied before the relief could be granted. I will expand on the reasons why I do not believe these are helpful in the operation of the relief. As a principle, I do not agree we should be moving away from the clear and simple aims of the policy by limiting this much-needed support.

The effect of Amendment 3 would be to exclude those who own and run facilities where a small fee is charged from receiving this relief. The Government’s policy aim and purpose in Clause 1 is to target the relief to best support the provision of public lavatories. In particular, we want to support facilities that exist where there are unlikely to be any other publicly available toilets, where removing the additional costs of business rates could make a real difference to the ability of councils or others to keep the facilities open. I understand the concerns of the noble Lord, Lord Kennedy, about free-to-use public toilets. Nevertheless, the purpose of this Bill is to provide targeted support to separately assessed public lavatories, recognising the particular circumstances they face, not to draw a distinction between those that charge and those that do not. Such a distinction would add complexity, uncertainty and an unnecessary administrative burden for local authorities and would increase the pressure on those facilities that are not able to access this support. I do not agree that those ratepayers that operate a public lavatory and charge a minimal fee for the first service should be excluded from this vital support.

I understand the practice of charging a fee is reducing, but those that charge do so on the basis of a commercial decision. In some cases, that fee may be charged to meet the ongoing costs of maintenance and cleaning, which is entirely reasonable. Nevertheless, I recognise the importance of knowing which facilities charge and what services they provide, so I welcome the work of the British Toilet Association, which provides an online service called the Great British Public Toilet Map, which has been referred to by the noble Baroness, Lady Randerson. This provides visitors with critical information about toilets in a specific area, including whether they are free to use, whether they are accessible and whether they have baby-changing facilities. Users can then make a decision in good knowledge and plan appropriately. I also commend the community toilet scheme, which was first devised by the London borough of Richmond upon Thames and is now used by local authorities across the country. This enables local businesses to work with councils to widen lavatory access so the public can use their facilities without making a purchase.

Amendment 10, proposed by the noble Lord, Lord Greaves, would limit the relief on the condition that the facilities should be open at set times and days as reasonably necessary. As I have outlined, our aim is to increase the support for the provision of public toilets, not to reduce the level of assistance for facilities that are most in need of support. I would not support the creation of a further burden on authorities to assess and police the opening and closing times of a toilet before awarding relief. The establishment of such a regime would be disproportionate to the value of the relief and would not represent good value for money to the taxpayer. As I have set out, the relief applies only to occupied facilities and is awarded only in these circumstances. While I understand the intention of the amendments from the noble Lords, Lord Kennedy and Lord Greaves, in practice, they may, at best, be unhelpful and, at worst, unnecessarily increase pressure on toilets to close.

I hope that I have helped clarify the Government’s intention about how the measure would apply. With these assurances, I hope the noble Lord, Lord Kennedy, can agree to withdraw this amendment.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank all noble Lords who have spoken in this short debate. We are identifying issues the Government should reflect on before this Bill comes back on Report.

The noble Lord, Lord Greenhalgh, has not sought to challenge my general point from my earlier remarks, that the position of the Government, in resisting any amendment here today, is that we are creating burdens on local authorities that far outweigh the benefits. Yet, as I have said, I have looked and cannot find any organisation from local government—the LGA, the Welsh LGA, the District Councils’ Network, London Councils, the National Association of Local Councils—or, in fact, any local council or local authority in England or Wales that would support the Government’s position. If they actually asked them, I suspect there would be a lot of support from local authorities for increasing the benefits of support for their network of public toilets. I will leave that point there, and at this stage, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, Amendments 4 and 12 in the name of the noble Lord, Lord Lucas, enable us to debate important issues. He seeks to ensure that lavatories that operate in accordance with national standards benefit from this relief.

The trade union Unison has campaigned on the issue of disability and the barriers that disabled people face when using a standard toilet. Many disabilities are hidden. The sign that we often see indicating disabled facilities is a person in a wheelchair, but fewer than 10% of people who meet the Equality Act definition of disability use a wheelchair. Signs that say “Some disabilities are invisible” have become more prevalent given the requirements of the pandemic restrictions. Crohn’s disease and colitis are two examples of conditions that may mean that a person has to use a disabled toilet facility while having no outward signs of disability.

As we move forward we need a greater understanding and respect for difference, and we must ensure that people are protected. These are not easy issues; if they were we would not be debating them today. What we also need is many more Changing Places toilets, which are a very important to cater for. We will get on to this later.

The comments from the noble Baroness, Lady Pinnock, reminded me that all the toilets by the reception at Southwark Council are gender-neutral, individual toilets. They are there for public use. So things are certainly changing, but we must at all times have respect for difference and for people. As we move forward on these issues we must ensure we keep those thoughts to the forefront and provide the facilities that people need.

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend Lord Lucas for his amendments, which would provide the Government with the power to limit this relief to only those toilets that meet prescribed criteria of their choosing. The underpinning nature of the amendments is the desire to see toilets for all, and I am very supportive of the need to have toilets for those who need disabled access, gender-neutral toilets and gender-specific toilets. As I set out to the House earlier, the Government do not intend to limit the measure within the Bill to only those toilets that meet certain criteria. Subject to Royal Assent, the Bill will support the provision of separately assessed toilets across the country. I therefore do not agree that it would be right to make any amendments which could limit the benefits of this measure.

Furthermore, limiting the relief to only those public lavatories that fit a prescribed description would place a significant burden on local authorities, which will be responsible for administering the relief. Well-intentioned though the amendment is, it would weaken the effectiveness of the legislation were we to require its provisions to be subject to a new, locally administered system of controls.

While I appreciate the arguments that my noble friend Lord Lucas made in support of the Government having the power to make this relief more specific, any benefits must be weighed against the consequential impact on local authorities of using such a power. Although I do not think that the Bill would be improved by these amendments, I appreciate the points that my noble friend makes about the standards of our public toilets.

The Government are interested not just in the total number of public toilets in this country but in ensuring that everyone in our communities feels confident and comfortable using them. This means maintaining hygiene standards and ensuring fair provision of accessible and gender-neutral toilets.

Noble Lords may therefore wish to note that the technical review of toilets launched by the Government will consider the ratio of female toilets needed versus the number for men and take into account the needs of all members of the community, to ensure fair provision of accessible and gender-neutral toilets. The call for evidence, which closes on Friday, has received over 15,000 responses; a government response will be published in due course. As part of this review, the merits of any best practice guidance on the provision of gender-neutral toilets will be considered, alongside any guidance on the necessary provision of access to disabled toilets. These considerations also include provisions for older people and parents with very young children who need changing facilities.

I hope this reassures my noble friend that the Government are supportive of not just the total number of public toilets but the vital importance of ensuring that appropriate facilities are available to all. On this basis—and the basis that the potential administrative burden resulting from these amendments would outweigh the benefits—I hope that he will agree to withdraw his amendment.

[Lord Lucas (Con) [V]]

My Lords, I am very grateful to my noble friend for his obiter dicta on the Government’s general intentions in this area, which I applaud. I can see that he has clearly understood the intent of my amendment and disagrees with it. I therefore beg leave to withdraw it.

--- Later in debate ---

[Baroness Pinnock (LD) [V]]

My Lords, these amendments proposed by the noble Lord, Lord Kennedy, explore the opportunities for public toilets within a public building that are not separately rated, so that they may benefit from the purposes of the Bill. In particular, Amendment 6 seeks to achieve the benefits of the Bill for those facilities providing changing places. These are inevitably included within public buildings, where there is the large amount of space available to provide changing places.

The noble and learned Lord, Lord Hope, has shared his expertise on these matters. He provides alternative thinking about derating hereditaments that provide public toilet facilities. The principle is sound; we all seek today to find ways of supporting public toilets through the financial benefit provided by the Bill, and not just those which are stand-alone. I hope that the Minister will, with his department, think carefully about the solution that the noble and learned Lord is pointing to. I certainly hope that we will be able to explore it on Report.

I for one support any means for exempting non-domestic rates where there is a public benefit. This debate has revealed the total incoherence of non-domestic rating. For example, in my own town of Cleckheaton the public toilets we have as part of our small market hall are separately rated and cost the council £15,000 a year in rates. These are no grand-affair public toilets; they are just two toilets, one for men and one for women. The cost of the rates is by far the largest element of expenditure on the upkeep of these toilets, yet they provide a free public benefit. The rate charged on this humble public toilet block is far in excess, in ratio terms, of that charged on an out-of-town warehouse providing storage for online shopping. This is all out of kilter.

Fundamental reform is essential and the Government have for too long avoided taking these difficult decisions. I hope that the Minister will consider all the helpful suggestions made this afternoon and be willing to think again about the contents of the Bill. I look forward to his reply today, and to further discussions and further debate on Report.

[Lord Greenhalgh (Con)]

My Lords, I appreciate the backing that the Committee has given to the measures in the Bill and recognise the arguments made in support of extending the relief further still. The first amendment tabled by the noble Lord, Lord Kennedy, would provide for relief to be given to properties which contain public toilets that are not separately assessed, and for that relief to be determined according to the proportion of that property occupied by the public toilet. The second would have the same effect, but separately for properties which contain Changing Places facilities.

In designing the scope of the Bill, the Government have given due consideration to the benefits to our communities of extending the relief to those toilets that are not currently separately assessed. However, these benefits must be weighed against the significant practical and financial implications of implementing such a relief. I hope that my colleagues present today have received a copy of the letter of 2 February setting out these implications in detail—actually, I think most noble Lords today have referred to it. For the benefit of the Committee, I will set them out again now.

The Government have taken the deliberate approach of targeting the measure within the Bill at supporting those toilets that appear separately on business rates lists. This means that this support will be available to those facilities for which the cost of business rates has the largest bearing on their ability to remain open. The amendment tabled by the noble Lord, Lord Kennedy, would require the separate assessment of the rateable value of public toilets that sit within larger properties, and for the awarding of a business rates discount relative to the proportion of the property that the toilet occupies.

A valuation exercise to provide an apportioned relief would be extensive and require the Valuation Office Agency to first identify where the facilities are, and then to assess the specific rateable value of each toilet relative to the property of which it forms a part. This exercise would carry significant financial and temporal costs, as pointed out by the noble and learned Lord, Lord Hope of Craighead. It would require business rates valuers to carry out assessments and, where needed, to make site visits up and down the country. As such, it would divert critical VOA resources from the priority of delivering the 2023 revaluation and could potentially delay the implementation of the core measure of the Bill before the Committee today.

The noble and learned Lord, Lord Hope of Craighead, mentioned a formula-based approach to derating. This would also result in considerable burdens, for example by requiring the VOA to identify the location of the public toilets. Obviously, the scale of the intervention is different from that for mines in the 1928 Act, but I am happy to discuss that technical approach with my officials between now and Report.

I am proud to be here today championing a measure that will be of great value to our communities. While I recognise the importance of all publicly accessible toilets, the cost of extending this relief according to the amendment would be significant—far greater than the financial benefit to operators of such facilities. I hope that the Committee will agree that a relief with implementation costs disproportionate to its financial benefits would not represent good value for money for taxpayers.

Although extending relief to toilets that form part of larger properties would undoubtedly bring about significant and disproportionate costs and practical difficulties, I appreciate that the second amendment tabled by the noble Lord, Lord Kennedy, concerns Changing Places toilets in particular. I therefore hope that the Committee will allow me to set out the steps that the Government have already taken to support these vital facilities.

I am proud to belong to a Government who are delivering on their commitment to provide more Changing Places toilets. At the last Budget, the Chancellor announced a £30 million fund to further extend the provision of these vital facilities and my department will shortly set out the allocation of this funding. I would be happy to provide my colleagues in the House with further details on this funding once they are available.

The funding comes on top of the £2 million announced by the Department for Transport to provide Changing Places toilets at motorway services and the £2 million made available by the Department of Health and Social Care to install these facilities in NHS hospitals across England. I hope that that reassures the Committee that where a Changing Places toilet is separately assessed, the measures in the Bill, subject to Royal Assent, act to reduce the business rates liability of these facilities to nil. While there are significant practical reasons why the Bill does not cover toilets—Changing Places or otherwise—within larger buildings, the Government are delivering on their commitment to supporting Changing Places toilets directly through grant funding.

I hope that with those assurances, the noble Lord, Lord Kennedy, will withdraw the amendment.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank all noble Lords who have spoken in this short debate. I was particularly grateful to the noble and learned Lord, Lord Hope of Craighead, for his explanation of what would appear to be a far simpler method of achieving what I am seeking to do. I might have a look at that before Report as it seems to be a simpler method.

I thank the Minister for his response. Obviously, I am pleased to learn of the additional government expenditure on Changing Places facilities. It is good to hear but we need to do more and go further. However, at this stage, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I am happy to give that clarification. I understand the intention of the noble Lord, Lord Greaves, in his amendment and support what he is trying to achieve. However, let me set out why it is unnecessary. His aim is to ensure that the relief cannot be applied in circumstances where a public toilet is permanently closed and out of use. I can assure the noble Lord that this is the Government’s intention. The Bill is therefore structured to reflect that aim. The Bill will amend only Section 43 of the Local Government Finance Act 1988, which relates only to occupied hereditaments. The Bill would therefore ensure that the relief would apply only to eligible occupied hereditaments, not to unoccupied public lavatories. As usual, local authorities will be responsible for determining the award of relief, having regard to the legislation, as they do with other relief schemes.

I hope that that clarification on how the measure would apply will help the noble Lord, Lord Greaves, to withdraw the amendment.

[Lord Greaves (LD)]

My Lords, I will read carefully the Minister’s reply—and go one more step towards being able to pass my GCSE in business rating. I accept his assurance that what he said will be the case. As on all these occasions, if it happens not to be the case, we will come back and harass him in the House. However, his reply was acceptable; I will read it carefully and attempt to understand it.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, these amendments would require the Government to carry out an assessment of the impact of the relief on the provision of public toilets. The first, put forward by the noble Lord, Lord Kennedy, would require an assessment to be made within a year of the Bill receiving Royal Assent, while the amendment tabled by the noble Baroness, Lady Greengross, would require an assessment of the impact to be published on a recurring, annual basis. The amendment tabled by the noble Baronesses, Lady Thomas and Lady Pinnock, would require an assessment to be made with particular reference to accessible toilets and Changing Places facilities. The fourth amendment, which has been tabled by the noble Baronesses, Lady Randerson and Lady Pinnock, would require such an assessment to review the impact of the relief on the cleanliness and maintenance of public toilets and the provision of baby changing facilities, in addition to the impact on the overall provision of public lavatories.

I appreciate the interest that noble Lords have in the efficacy of the measure within the Bill and assure the House that the Government keep all business rate reliefs under review. I also want to meet with interested noble Lords and the British Toilet Association before Report to see how we can review implementation of this relief. That is an important step and, I hope, will be an opportunity to discuss some of the issues that have been raised.

Before I turn to the detail of the amendments, I will respond to the question raised by the noble Lord, Lord Greaves, that I failed to answer earlier. I can confirm that the relief for all separately assessed toilets applies irrespective of ownership. I want to be clear on that point.

On the provision of public lavatories, the Committee may be interested in the data that is already published annually, to which I have already referred. There are some 3,990 separately assessed public toilets in England and Wales, and this figure is constantly updated and monitored. We do not want to see reductions, and it is clear that by significantly reducing the operating costs of these facilities, the measures in the Bill will help to keep public toilets open up and down the country.

While these measures constitute a significant element of support for these facilities, a number of other factors determine whether a toilet is able to remain open. Ultimately, the decisions on whether to maintain or close a facility must be made by the operator of the facility, often the local council. These decisions will usually be based on wider funding pressures, as well as the number of toilets elsewhere in the local area.

The Government strongly support the continued operation of our public toilets. As I set out earlier, we are providing £30 million of grant funding to directly support the provision of Changing Places toilets in particular. I also set out at Second Reading some of the good work that councils have undertaken through community toilet schemes to maintain and increase provision in their local areas. However, it is clear that there are a number of factors that determine whether a toilet is able to stay open, and it would not be possible to attribute any future changes in the overall provision of public lavatories, or facilities of any specific type, solely to the measures in this Bill. Equally, I do not envisage any direct link between business rates relief and the maintenance and cleanliness of existing public toilets. For this reason, and because the number of separately assessed public toilets is already published on an annual basis, I hope that noble Lords will agree that any assessment of the kind proposed would be unnecessary and an ineffective use of government resources.

However, I welcome the fact that the Bill has shone a light on the interest from across the Committee in our public toilets, and I recognise the passion with which my colleagues have spoken of the need for adequate provision of accessible toilets in particular. I hope that the Committee will therefore allow me to conclude by reiterating the support of the Government for these vital facilities.

A number of noble Lords spoke about the importance of accessible toilets. The noble Baroness, Lady Thomas of Winchester, again raised the issue of Changing Places toilets and the disbursement of the £30 million of funds. I am happy to give further details on the progress of that, I hope before Report. It is important to many people in the country that we ensure that the absence of accessible toilets is reduced, because lack of accessible toilets reduces the ability of people with a disability to make use of our public spaces with confidence.

The noble Baroness, Lady Randerson, raised the important question of design and doors opening inwards, thereby reducing space. That is a good point, and everyone here nodded in agreement with that sentiment. So I am pleased to let the Committee know that a technical review is looking at the ergonomics and features of toilets and will I hope take some of these points on board. We hope to see an improvement in design in the future.

While the Bill is important, the provision of public toilets is rooted in a number of factors, and in the particular case of accessible toilets, the Government are providing direct grant funding. On this basis, and as the number of separately assessed public toilets is already published on an annual basis, I hope that the noble Lord, Lord Kennedy, will agree to withdraw his amendment.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank all noble Lords who have spoken in the debate. I agree with the comments made by the noble Lords, Lord Lucas and Lord Greaves, and the noble Baronesses, Lady Thomas of Winchester and Lady Randerson, and my noble friend Lady Andrews. The decline in the provision of public lavatories is a matter of great concern. The adequate provision of toilets is a public health matter, as my noble friend Lady Andrews said in this debate.

I agree with the noble Baroness, Lady Randerson, that many accessible toilets are poorly designed, despite considerable sums of money having been spent on them. I also agree with her that the need to provide more toilets for women and for men, and more gender-neutral toilets, as well as accessible and Changing Places toilets, is of paramount importance. As I have said, it is about understanding needs, the lack of provision of toilets for women, and ensuring respect for difference, along with the provision of facilities that are clean, safe and secure, and which people feel are safe to use.

The Bill does not address these issues because of its narrow scope, but I am sure we all agree that those are important matters. They are relevant issues that need to be addressed. I was very pleased by the offer of the noble Lord, Lord Greenhalgh, to meet interested Peers between now and Report, along with representatives of the British Toilet Association, and I look forward to taking part. However, at this stage I am happy to withdraw the amendment.

Non-Domestic Rating (Designated Area) Regulations 2021

Lord Greenhalgh Excerpts

Wednesday 24th February 2021 Lords Chamber

Moved by

[Lord Greenhalgh]

That the draft Regulations laid before the House on 12 January be approved.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, you will recall that under the business rates retention scheme introduced in 2013-14, local authorities typically keep up to 50% of the business rates collected from local ratepayers. The actual amount retained by the authority depends on its local share, the amount that it pays or receives as part of the redistribution arrangements—its so-called tariff, or top-up—and ultimately whether it pays a levy on its growth, or receives a safety net payment because its business rates income has declined.

While the complexity of the rates retention scheme can sometimes be quite daunting, the underlying principle is really very simple. It allows local authorities, for the first time since 1990, to keep a share of the growth in their local tax base, over and above the resources they get from central government. However, there is another way in which local government can benefit from the rates retention scheme: through the designated area arrangements.

The Government can designate a discrete geographical area in which the rates income, or some part of it, is ignored for the purpose of tariffs, top-ups, levy and safety net. Instead, the rates income is retained in its entirety by the local authority. Since 2013, the Government have created over 200 designated areas, most as part of enterprise zones. In such areas, authorities have been permitted to keep all the growth in their business rates for a period of 25 years, the additional business rates income being used by authorities and their local enterprise partnerships to help the regeneration of those areas. Other designated areas have been set up specifically to allow authorities to keep all the growth in business rates, to create an income stream against which authorities have been able to borrow for specific infrastructure improvements. In total, between 2013-14 and 2019-20, authorities have kept an additional £237 million from designated areas, which has been used to provide improved infrastructure and to support regeneration more generally.

The regulations create a new designated area in Teesside, that of the South Tees Development Corporation. Once the regulations are in force, Redcar and Cleveland Borough Council and the Tees Valley Combined Authority will keep all the growth in business rates for a period of 25 years. This development corporation site is the first mayoral development corporation outside London and was inspired by the independent report of the noble Lord, Lord Heseltine, in June 2016. In covering the industrial area that had been blighted by the liquidation of the SSI steelworks, he foresaw the development opportunities that would be afforded by this 4,000-acre site on the south bank of the River Tees, a site with good road and rail access, and sitting alongside one of the deepest ports on the east coast of the United Kingdom. He recommended the establishment of the South Tees Development Corporation and advised the Government and local partners to put the relevant resources in place to realise this goal.

The designation of this special economic area is part of that financing plan—part of a masterplan that will see new investment on the site and the creation of an additional 20,000 new good-quality jobs on one of the largest development sites in Europe. It builds on central and local government investment to initially deal with the legacy of steel-making and ensure that the site was kept safe and secure, before working with local, national and international investors on what market opportunities are most relevant to the site. The development corporation secured ownership of the developable land through agreement and a compulsory purchase order, bringing order to a piecemeal and incoherent situation, and allowing developments at scale.

There is a healthy pipeline of investment interest in place, and the provisions of this statutory instrument will ensure that, as the land is developed and new industries emerge, part of the business rates income will be reinvested in site development. It is a virtuous circle, where success in investment will bring resource to accelerate the development of the site. The regulations provide that the designated area will come into force only after the Government are satisfied that Redcar and Cleveland Borough Council and the Tees Valley Combined Authority have put in place arrangements that ensure that the money they keep as a result of these regulations will be used solely for the benefit of the South Tees Development Corporation.

To that end, the Government have negotiated a memorandum of understanding with Redcar and Cleveland Borough Council and the Tees Valley Combined Authority which will ensure that there are clear revenue-sharing arrangements in place, protecting the finances of the local authority and enabling funding to be released for the development of the site. This will be signed as soon as Parliament agrees to the regulations, and will enable the designated area to come into existence on 1 April 2021. From that point, all growth in business rates will be shared 50:50 between the council and the combined authority.

Growth will be measured exactly as in other designated areas. Schedule 2 provides details of that measurement. When in any year the business rates income in the designated area is greater than a baseline amount, set out in Schedule 1, the council and combined authority will keep 100% of the difference. The baseline amount—a little over £7 million—has been set by Redcar and Cleveland Borough Council. It represents the annual amount of business rates that it would expect to collect in the designated area at this point in time. As the regeneration of the development corporation increases, the council and combined authority will keep every pound of the collectible business rates above that £7 million baseline. This will be reinvested in the area, generating still further growth.

These are important regulations. They will provide additional funds over an extended period, allowing the council and the combined authority to invest in the regeneration of South Tees. I commend them to the House.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, we have indeed had an interesting and extremely wide-ranging debate on the regulations before us. I thank noble Lords on all sides for their thoughtful contributions.

The noble Lord, Lord German, talked about looking at a land value taxation scheme. The noble Baroness, Lady Wheatcroft, the noble Lords, Lord Hain and Lord Kennedy, and a number of other noble Lords raised the issue of the future of business rates. We need to wait for the outcome of the fundamental review of business rates; it was recently declared that that will be published in the autumn. It is very important that we are cognisant of these seismic shifts that we have seen between physical retail on our high streets and town centres and the move to online, which of course has been accelerated by the Covid-19 pandemic.

The noble Lord, Lord Hain, gave an eloquent speech about how government can and should support our town centres, which are really hurting as a result of this pandemic in particular. I point to this Government’s sizeable towns fund, which is £3.6 billion and will be allocated in £25 million chunks, with town deals that look to unleash the economic success and vibrancy of our town centres and high streets—£1 billion of that is specifically for our high streets, which are such an important part of life in our towns and cities. In terms of support, that is something we are bringing forward.

On rates relief and the future of business rates relief, an incredible £10 billion has been saved by providing a business rates holiday. The decisions on the future of that for 2021-22 will, of course, be something that is considered by the Chancellor in the upcoming Budget.

A number of noble Lords, including the noble Baroness, Lady Wheatcroft, talked about the important issue of the simplification and reform of local government finance. It is fair to say that, before the pandemic, we had long and detailed discussions with local government about reforms to the local government finance system. These included possible reforms to the allocation of funding, by means of a review of relative needs and resources, and to the business rates retention system. Earlier in the financial year, we announced that the Government will not proceed with reform in 2021-22. The Government’s decision was to postpone reform and was taken in the interest of creating stability for local authorities, and it has allowed both the Government and councils to focus on meeting the immediate public health challenge posed by the Covid-19 pandemic.

However, once the pandemic is over—we have announced our road map to recovery—we will work with local government to understand the lasting impact it has had on both service demands and revenue raising. We will then revisit priorities for the reform of the local government finance system, taking into account wider work on the future of business rates and adult social care, so the final decisions about reform will be taken in the context of next year’s spending review.

Both the noble Lord, Lord Kennedy, and my noble friend Lord Kirkhope raised the issue of new designated areas and the process, which is essentially by application. We have already created 226 designated areas across 94 different local authorities in England, mostly in enterprise zones; this includes 22 in Yorkshire and another 30 in Humberside. While we currently have no plans to roll out more enterprise zones, we are considering creating designated areas as part of free ports, as set out in the prospectus we published in November 2020. We are currently considering the applications that we received in response to that prospectus and hope to make a further announcement shortly. More generally, we are always looking at how best to help local government and partners meet their regeneration needs and challenges.

My noble friend Lady Gardner and the noble Lord, Lord Kennedy, raised a number of points about the differences between the lengths of time for which areas are designated. The majority of designated areas run for 25 years. This is because we recognise that the effective regeneration of an area requires a sustained long-term commitment, which needs to be underpinned by long-term funding arrangements. A few designated areas, such as those mentioned by my noble friend, in Brent Cross and Croydon, were put in place solely to provide a funding stream to enable authorities to borrow for specific infrastructure developments. The period for which those designated areas run was worked out with the authorities concerned to ensure that, based on their projections of the likely additional business rates yield, they would have sufficient additional funding to repay their loans.

On the question of how many applications are refused, over the years designated areas have been selected in a number of ways. The first enterprise zones were created before the business rates retention scheme had come into force. Subsequent designated areas were created following discussions with local enterprise partnerships and local authorities. In 2016, we ran an open competition which led to the creation of 24 new enterprise zones—many comprising multiple designated areas—from some 60 applications. As with Brent Cross and Croydon, we have also created a handful of designated areas, having been approached by individual authorities to assist with the financing of specific infrastructure projects. In all, we have designated 226 separate areas across 94 different authorities. Since 2013, these have contributed nearly £240 million of additional investment in the regeneration of areas throughout England.

Along with the noble Lord, Lord Kennedy, and as someone who was formerly a local authority leader, I pay tribute to the contribution of the noble Lord, Lord Heseltine. He is the regeneration impresario. In principle, it is about how we can take locally generated investment and reinvest it in the local area—effectively pump-priming money put in by the state by leveraging in money from the private sector. This is behind the approach we are taking in South Tees. The noble Lord, Lord Heseltine, took those principles and reapplied them again and again, because they work. He made a huge contribution in this field. With regeneration comes opportunities for good-quality jobs. It helps lift whole areas. It is important that we find measures within local finance to enable and encourage local authorities to grow so that they can reinvest in their local areas, so that we have that virtuous cycle.

The regulations will ensure that, from 1 April, any growth in business rates will be retained in its entirety by Redcar and Cleveland council and the Tees Valley Combined Authority. Instead of having to be shared with central government, this can be used for the benefit of the local area. They will provide those authorities with an income stream over 25 years that will be used to invest in the South Tees Development Corporation. This investment will secure the creation of new industries and 20,000 new jobs in an area blighted by the closure of the former steelworks.

In conclusion, these regulations make an important contribution to the redevelopment of one of the largest development sites in Europe. They underline the Government’s long-term commitment to the regeneration of South Tees, and I commend them to the House.

Motion agreed.

North of England: Investment

Lord Greenhalgh Excerpts

Tuesday 23rd February 2021 Lords Chamber

[The Lord Bishop of Newcastle]

To ask Her Majesty’s Government what assessment they have made of the report by the Centre for Policy Studies A Northern Big Bang: Unleashing Investment in the North, published on 14 February.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

The Government welcome the contribution made by the Centre for Policy Studies report. Levelling up the north of England is a key priority for this Government, and the coronavirus crisis has made it more important than ever that the Government continue to drive forward progress on our promise to deliver real, positive change in the north.

[The Lord Bishop of Newcastle [V]]

I draw attention to my interest as the chair of the North of Tyne Combined Authority inclusive economy board, as set out in the register. It is rather shaming that the UK is the most geographically unequal of the OECD group of 27 rich countries. The Treasury’s historical approach to investment has widened rather than closed the north/south divide. I want to press the Minister on whether he agrees with the central thrusts of the report: first, that levelling up will rely on the power, dynamism and scale of investment which only the private sector can bring; and, secondly, that the economic success of the north is too important to the people who live there to be left in the hands of those who do not. Do the Government accept that business as usual simply will not cut the mustard?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, we recognise the need to unlock private investment, and the government investment is designed to do precisely that, with the £4 billion levelling-up fund; but, equally, we need to devolve decision-making closer to the people in the north of England.

[Baroness Altmann (Con)]

My Lords, I congratulate the Government on their £4 billion programme and support the aims of building back better, a green industrial revolution and attracting global capital. Will my noble friend comment on the possibility of using domestic pension assets, of which there are hundreds of billions of pounds, including in local authority funds, which are currently investing only in gilts with extremely low returns and which could be put to more productive use in such building programmes?

[Lord Greenhalgh (Con)]

My Lords, my noble friend is right that pension assets are an important source of finance for investment in infrastructure. I note that the CPS report proposes updating rules covering UK pension schemes so that we can encourage investment in northern infrastructure.

[Lord Ravensdale (CB) [V]]

My Lords, although the paper is entitled A Northern Big Bang, many of the problems described and the possible solutions identified are as relevant to the Midlands as they are to the north—a point the authors stress throughout the report. Does the Minister agree that measures to level up our country are just as, if not more, urgently needed in the Midlands as they are in the north, and will he comment on what plans the Government have to work with the Midlands Engine, the APPG of which I am co-chair, in that regard?

[Lord Greenhalgh (Con)]

My Lords, I point out that the commitment to levelling up also includes the Midlands. Earlier this month, my right honourable friend the Housing Secretary met the Midlands Engine Business Council and numerous business leaders to work on precisely how we should drive forward the agenda to ensure growth in the Midlands as well as in the north.

[Lord Sikka (Lab) [V]]

My Lords, history shows that major industries, such as gas, water, electricity, engineering, petrochemicals, airlines, biotechnology, telecommunications, computers and medicines, were built or rejuvenated by the state because the private sector showed little appetite for the risks and investment. Does the Minister agree that direct state investment is vital to secure prosperity for the north? If not, why not?

[Lord Greenhalgh (Con)]

My Lords, we recognise the importance of direct government investment, but we must also ensure that the £4 billion of the levelling-up fund leverages in private sector investment. It is those two working in harness that provides the solution.

[Lord Beith (LD)]

Attracting private investment to the north requires a functioning transport system. Why are Ministers declining to listen to the Northern Powerhouse Rail business case for substantial investment across the north before they produce their own integrated transport plan? What hope is there of the level of improvement to the transport system—for example, the east coast main line, which requires expanded capacity both south and north of Newcastle essential to expanding the passenger and freight capacity of that line?

[Lord Greenhalgh (Con)]

My Lords, I recognise the importance of transport in driving progress and investment in the north of England. That is why there has been £13 billion of investment—the largest of any Government in history—between 2015-16 and 2020-21, and there is now also a five-year intra-city transport settlement to ensure the north gets the transport infrastructure it needs.

[Lord Berkeley (Lab) [V]]

Following on from the question of the noble Lord, Lord Beith, on transport, can the Minister explain some of the figures in his response and why the Government have delayed investment in the trans-Pennine railway line while at the same time spending £760 million on the east-west rail link between Oxford and Bedford, which is certainly not even in the Midlands nor the north? How is this levelling-up the economy?

[Lord Greenhalgh (Con)]

I am not exactly in the right department when it comes to individual transport projects, but there is a huge commitment to increasing investment in transport infrastructure. The organisation Transport for the North has received funding to develop the strategy so that we can get the right investment into the north.

[Lord Holmes of Richmond (Con)]

My Lords, I declare my interests as set out in the register. The big bang of the 1980s was driven by the right regulatory framework and the technologies of the time. Fast forward 35 years and we have a leading position in many of the technologies of our time—AI, distributed ledger technology, cyber and fintech. Does my noble friend agree that if we deploy those technologies, not least in proposed fintech clusters in the north and other regions, it will have a profoundly positive impact on jobs and skills and—if combined with the right regulatory framework rooted in consistency, clarity, competitiveness and innovation—it will truly transform our nation?

[Lord Greenhalgh (Con)]

My noble friend is right that we need to look at the emerging economy and encouraging fintech clusters so that we get more high-skilled jobs located in the north. That is why the Chancellor’s decision to locate the national infrastructure bank in the north is also helpful in this regard.

[Lord Curry of Kirkharle (CB) [V]]

My Lords, my interests are as recorded in the register. In the north, we have a double challenge. We need not only north/south levelling-up but rural/urban levelling-up. Can the Minister confirm how soon the Government will announce details of the shared prosperity fund and whether there will be a dedicated rural element to it?

[Lord Greenhalgh (Con)]

I am not in a position to announce further details on the UK shared prosperity fund.

[Lord Wrigglesworth (LD) [V]]

My Lords, there is a glaring omission in this report. Its proposals for business and the built environment have been applied in one form or another since the Jarrow march in the 1930s, and I wish them well. However, levelling up is not a problem of business and the built environment but a people problem. What are the Government going to do to improve education and training opportunities, and invest in people through projects such as Sure Start, to help minority communities and the white working class in the regions break out, so they can make fulfilling lives for themselves and a greater contribution to their regional economies?

[Lord Greenhalgh (Con)]

My Lords, the noble Lord is right that we need to see not only economic development and growth in the economy but social regeneration and the upskilling of people in the north. That is why one part of the agenda is the devolution of decision-making, including adult education and skills budgets, to the mayors responsible for driving that agenda, as well as the economic agenda.

[Lord Blunkett (Lab) [V]]

I draw noble Lords’ attention to my registered interests. On 19 February, the Government made a welcome, if modest, announcement on the establishment of the Advanced Research and Invention Agency. Do the Government acknowledge, as they surely must, that unless the agency is able to deploy money directly to the north of England, as opposed to the golden triangle of Imperial, Oxford and Cambridge, we will not have the inventions or attract the inward investment that the report so graphically laid out?

[Lord Greenhalgh (Con)]

My Lords, there should be no barrier to investing in the research and innovation that the noble Lord outlines. I am sure that the Government will take his point on board.

[The Deputy Speaker (Lord Alderdice) (LD)]

My Lords, I regret that we were not able to make it to all Members on the list but the time allowed for this Question has elapsed.

Building Safety

Lord Greenhalgh Excerpts

Monday 22nd February 2021 Lords Chamber

[Baroness Pinnock (LD) [V]]

My Lords, I thank the Minister for the repeat of this important Statement on the Government’s response to the cladding crisis. I remind the House of my interests, recorded in the register, as a member of Kirklees Council and a vice-president of the Local Government Association.

I was pleased when I read the heading of the Statement, “Building Safety”, and the opening paragraph, which refers to the mission of the Secretary of State being that of “safety and fairness”. Unfortunately, the Statement then fails to live up to those laudable words. The first issue I have with it is that throughout, there is reference only to “unsafe cladding”. In fact, what has become clear, as the vast scale of the problem that the Grenfell tragedy exposed, is that the building safety failings go far beyond “unsafe cladding”. As flammable cladding is removed, in some buildings further significant construction failings are revealed: flammable insulation has been used; firebreaks have not been built into the structure as a way of slowing the spread of a fire; balconies are not made of fire-retardant material; and spandrel panels are also seen as a potential safety concern.

How do I know this? In January 2020 the Ministry of Housing, Communities and Local Government issued guidance note 23, relating to the seven building components under review, requiring building owners and managers to take urgent action on these. The question for the Minister, therefore, is: will the additional government funding pay for all the defects revealed when the unsafe cladding is removed? If, for instance, it becomes evident that there is an absence of firebreaks, will the funding cover the costs of installing them? If not, the leaseholders will still be faced with large bills to pay for failings in the construction.

The next fundamental question that I hope the Minister can answer is: why has 18 metres been chosen as the bar above which cladding removal is funded by the Government and below which the leaseholders and tenants are required to pay? Is the 18-metre figure an historic one that needs to be reassessed? Serious fires can occur in blocks of varying heights: for instance, the fire in a block called The Cube, in Bolton, was very serious—although fortunately, there was no loss of life—but the building was lower than 18 metres.

That leads me to the question of fairness. As noble Lords will recall, this is the mission of the department in respect of building safety. Can the Minister explain how it is fair for leaseholders in blocks below 18 metres high to have to pay for remediation? I recognise that low-interest loans are available and that the currently anticipated maximum payment is £50 per month. This will, no doubt, be added to the service charge and will be one of the costs that potential buyers will consider. It will make these flats less attractive to buyers and they will almost certainly command a lower value. How is it fair to require leaseholders to pay for building remediation which is not in any way of their making?

One of the roles of government is to ensure that safety regulations are appropriate to the task and that there is an inspection regime. The Government have failed to do this, so they are partly culpable, must bear the cost and recoup it from those who share culpability.

Then there is the question of building regulations. It is alleged that some of the buildings affected by this scandal failed to comply with building regulations at the time of construction. Can the Minister confirm this and provide some estimate of the numbers involved? Where breaches of regulation are involved, will the Government require full remediation costs to be met by the developer? This is what happens with the manufacturers of cars and white goods, for example. Surely it should also apply in these instances. Does the Minister agree?

Next, I turn to the total funding package. The additional funding provided by the Government is a start, but this £5 billion needs to be put into context. During the debate on the Fire Safety Bill, the Minister confirmed that the total cost of remediation was likely to be in the region of £16 billion. Does that imply that £10 billion or more will be paid for by leaseholders through the loan scheme? Perhaps the Minister will let us know whether this is what the Government have calculated.

It is proposed to recoup some of these costs from developers by raising £200 million per annum via a tax on the sector. The cost of the minority of the remediation to be recouped from developers is pathetically small. During the last four years, the five largest developers made profits of around £16 billion, which rather puts the proposed figure into context. Will the Government reconsider the level of this tax to make it fairer?

Finally, I hope that the Government do not need to be reminded of the terrible, personal cost of the cladding scandal. For instance, Laurel and Jonathan in Manchester are seriously considering bankruptcy as the only way out of their predicament. Hayley in Leeds has already been forced into bankruptcy. In an Inside Housing survey last year, 23% of respondents said that they had considered suicide. Such is the stress of living in an unsafe home and being forced to pay huge increases in insurance and service charges. For leaseholders and tenants, this building safety crisis is not in any way of their making, yet they are expected to pay the price while those who created it are not being similarly expected to pay in any significant way. Can the Minister explain how this adheres to the department’s mission of fairness? Will he press for a review of the current proposals as more information comes to light?

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, around £3.5 billion in direct, additional grant has been committed. This is a significant amount of money which dwarfs the £1.6 billion previously promised. More than £5 billion has been committed to support the ending of the cladding crisis. The plans go a long way towards ensuring that affordability is not an issue for any leaseholders in medium-rise properties. It also ensures that, where there is no warranty outstanding or insurance available to protect the leaseholder, the taxpayer—through the Government’s additional grant—will step up and provide the funding necessary to ensure that the cladding system is removed.

The noble Lord, Lord Kennedy, asked about progress. Despite Covid, we saw 50% more starts in 2020 than in any other year. Workers were on site and, by the end of the year, 95% of high-rise buildings with the same sort of cladding as at Grenfell had either started or completed remediation. We know exactly where these buildings are. The vast majority of the remaining cladding will have been removed from them by the end of this calendar year.

The main thrust of the questions was around the scope of the fund. It is important to recognise that height is a huge factor when it comes to safety and the risk to life. The higher the building, the more risk there is to the residents. People who live in buildings between 18 and 30 metres high are four times more likely to have a fire involving a fatality or the need for hospital treatment. In buildings above 30 metres, this rises to 35 times more likely. We know that height is a factor. Eighteen metres is the cut-off point for the definition of a high-rise building. This has been part of building regulations for a considerable number of years. The definition that we are using for scope is above six storeys, so The Cube would fall within the remit of a building where an application could be made to the building safety fund to remove its cladding. The threshold is six or more storeys or a height greater than 18 metres.

The long-term safety advice makes it clear that the external cladding system acts as accelerant, helping the fire to spread. This is why the government money is focused on the removal of external cladding systems. Internal compartmentation, firebreaks and fire doors are designed to stop the spread of fire. It is right that taxpayers’ money should focus on the material that accelerates the spread of fire.

The £3.5 billion and the finance scheme will together help hundreds of thousands of leaseholders. For those in medium-rise properties, it will cover a significant part of their costs. For those in high-rise buildings, there will be no cost. To date, 13,000 leaseholders in ACM buildings have been supported by the government grant scheme. Between 70,000 and 90,000 leaseholders in buildings with non-ACM cladding systems will not bear any cost. A further 150,000 leaseholders in buildings between 11 and 18 metres high will also be helped.

It is important, however, that building owners step up to the plate to support remediation where the government grant is not available. We do not expect this cost to fall entirely on leaseholders. With the ACM fund, more than 50% of owners did the right thing and ensured that the cost did not fall on leaseholders. We expect to see that with the non-ACM buildings as well. Here, warranty schemes can often still be drawn on and protect leaseholders.

It is worth looking at the cladding manufacturers. I will take that point away because, as well as the developers, they are culpable for the situation that we find ourselves in—a point that has been made by both the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock. That is something that we can look at in due course.

This is a five-point plan looking at significant sums of money to support the removal of the external cladding systems. It is those systems that have accelerated the spread of fire and their removal makes it far more unlikely that Grenfell will ever happen again. We know that the future building safety regime will be focused on ensuring that the new buildings will be of far greater quality and then provide the greater confidence that is required in the housing market to ensure that it begins to function properly in future years.

[The Deputy Speaker (Baroness Barker) (LD)]

We now come to the 20 minutes allocated to Back-Bench questions. Questions and answers must be brief.

[Lord Young of Cookham (Con)]

My Lords, in welcoming the extra support for leaseholders, I commend my noble friend on the role that I know he personally played in shifting the Government’s position. On the developer levy, which I called for last year, can he explain why it is going to be levied on future developments—which, as he has just explained, will not have the same problems, and where indeed the developers may be new to the market—rather than on those developers that are responsible for the defects and that did very well on the proceeds?

[Lord Greenhalgh (Con)]

I thank my noble friend for recognising that this announcement includes a developer levy, which he was lobbying for. It will be on future buildings, but at the same time we recognise the role that a number of developers have played in creating the cladding crisis. That is why the Secretary of State also announced that a new tax would be introduced for the UK residential property development sector that will ensure that the largest property developers also make a fair contribution to the remediation programme. We think that these measures taken together will ensure that the industry does more to contribute to the remediation of historical cladding defects and will play its part in dealing with this crisis.

[Baroness Finlay of Llandaff (CB) [V]]

To

“make the industry pay for its faults of the past”,

how will the Government recoup the full cost from those resistant to undertaking remedial work before they close their companies? Are those who deliberately concealed evidence of the flammability of ACM panels to be subject to corporate manslaughter investigations?

[Lord Greenhalgh (Con)]

My Lords, we will continue to push very hard to ensure that developers make their contribution. As I pointed out, historically we have seen developers and building owners step forward and pay for the remediation and removal of unsafe cladding that is on their buildings, and we will continue to push developers to do the right thing. However, the levy and the new tax are set to raise significant sums of money. The tax itself is estimated to raise £2 billion over 10 years.

[The Lord Bishop of Newcastle [V]]

My Lords, many leaseholders in high-rise and medium-rise buildings are currently receiving insurance premium quotes for many times the previous annual cost. Much of the additional premium is a consequence not of cladding directly but of wider concerns regarding fire risk in their building, so removing and replacing deficient cladding will not in itself return premiums to a level of normality. Can the Minister tell us of any plans to make the representatives of leaseholders and the insurance industry agree a joint approach to alleviating this unacceptable burden?

[Lord Greenhalgh (Con)]

My Lords, I can say that we are meeting with representatives of the insurance industry and of the cladding groups to work on precisely that—a solution to make sure that there is a proportionate, common-sense approach to building insurance. I underline that increasing the pace of remediation is likely to see a return to more sensible policies regarding the setting of building insurance.

[Baroness Warwick of Undercliffe (Lab) [V]]

My Lords, I declare an interest as chair of the National Housing Federation. Can the Minister explain why this very welcome new funding will not be made available to remediate the homes of people living in social housing? Housing associations do not have profits to draw on and local councils cannot simply deplete their reserves, so to make homes safe they will have to divert rental income that would have been spent on the upkeep of tenants’ homes, investment in their communities or building much-needed new affordable homes. Does the Minister accept that the only way to resolve this problem once and for all is for the Government to provide up-front funding for the remediation of homes of all tenures and then claw back as much as possible from those responsible for creating these inadequate buildings in the first place?

[Lord Greenhalgh (Con)]

My Lords, I point out that the priority of this Government is to protect leaseholders from facing the costs of the removal of unsafe cladding, whether they are in social sector buildings or in private buildings. Where registered social landlords feel that they need to impose costs on leaseholders, access to grant funding is available as well as the new financing scheme. That protects the leaseholders in those properties, which is the priority of this Government.

[Lord Shipley (LD) [V]]

My Lords, I remind the House that I am a vice-president of the Local Government Association. Those in a flat 19 metres high will have unsafe cladding replaced at no cost, and that is welcome. Those in a flat 17 metres high will have to pay up to £50 a month for an unknown period. Why do the Government think that is fair?

[Lord Greenhalgh (Con)]

My Lords, I pointed out that height is a marker for risk. Those buildings greater than 18 metres are four times more likely to result in a fire-related fatality or someone needing to go to hospital for treatment. Above 30 metres, that rises to 35 times more likely. So the focus needs to be on removing the material that accelerates the spread of fire in buildings that in and of themselves, through height and being of residential use, are at greater risk of causing fatalities.

[Lord Best (CB) [V]]

My Lords, following the question from the noble Baroness, Lady Warwick, I understand that housing associations can apply for support from the extra £3.5 billion of additional funding for the rectification of these appalling building defects in high-rise blocks, but that help will be available only for flats sold to leaseholders for defects in housing association flats that are retained for letting. All the costs will fall on the housing association itself, requiring the diversion of funds intended for other purposes, particularly building new homes. Can the Minister give an estimate of how many new, desperately-needed social rented homes will be lost because of this?

[Lord Greenhalgh (Con)]

My Lords, I am not in a position to give an estimate of that kind, but I recognise that social landlords have significant resources that they can put into making sure that their buildings are safe, and many are proceeding to do precisely that. I do not think we can easily estimate the impact on new build, but we can say that the funds support those leaseholders who would face costs without access to grant funding or the financing scheme.

[Lord Lancaster of Kimbolton (Con) [V]]

The Government have secured a welcome agreement on EWS1 forms that will benefit thousands of home owners. Many other home owners, however, still need to secure such a form before they can move on with their lives. Can my noble friend outline what steps the Government are taking to make securing such forms easier?

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend for raising this significant issue. We are looking at how we can increase the supply of the professionals needed to carry out those EWS1 assessments, and we have provided £700,000 worth of funding to the Royal Institution of Chartered Surveyors, and that is looking to upskill around 2,000 building surveyors to be in a position to do that after about a month’s training. As well as increasing the supply, we are working closely with RICS and other parties to narrow the scope of when EWS1 is required. You should not need to have an assessment of an external wall system in buildings under 11 metres. There is less latitude in buildings above 18 metres, and a number of buildings between 11 metres and 18 metres will also not require an EWS1. It is only in the event that they are covered with some kind of external cladding system to a great degree—let us say, more than 25%.

[Lord Campbell-Savours (Lab) [V]]

Why do the Government not require every local authority to publish the addresses of all buildings falling under cladding fire risk categories? Is the FOI response from the DCLG of 12 March last year refusing such information still valid where it spuriously states that

“disclosing it would be likely to endanger the safety of individuals”

and

“could enable someone to identify particular buildings”,

usable by “those with malicious intent”? That could apply to any inflammable building, a chalet or indeed any temporary building.

[Lord Greenhalgh (Con)]

My Lords, it is sensible to be very careful about the dissemination of information about the precise locations of buildings with flammable material. We need to recognise that there are potentially people out there with malicious intent. It is right and proper that we keep information that would enable people to identify those buildings confidential as far as possible.

[Lord McNally (LD) [V]]

My Lords, much of the effectiveness of this legislation will depend on the power and vigour of the building safety regulator. Will that be a named individual or a committee? If it is a named individual, will he or she have the same powers as an ombudsman and receive complaints from individuals and community groups who have often complained and warned but never had access to a decision-maker?

[Lord Greenhalgh (Con)]

I share the noble Lord’s scepticism about the value of committeeism. I am pleased to announce that the leader of the new building safety regulator, the chief inspector of buildings, has been announced. I am delighted that Peter Baker, the acting chief inspector, has been confirmed as taking up the reins and ensuring that this new regime works. He will be accountable to ensure that that happens.

[Baroness Altmann (Con)]

My Lords, I welcome the gateway 2 developer levy and the new tax on residential building developers. I echo the calls for my noble friend to look carefully at recouping costs of remediation work from developers of past projects and not just those in the future, especially those who failed to comply with building regulations or cut corners at the time of construction, and the manufacturers of the cladding materials including ACM.

[Lord Greenhalgh (Con)]

I thank my noble friend for making the point. It would be fair to say that the new tax on developers, details of which will be announced shortly, will include a number of the major developers historically responsible for high rises. She makes an important point that we should also consider the role of cladding manufacturers in this crisis. It is fair to say that, while developers have made good solid profits in recent years, the cladding manufactures have had healthy profit margins too. It is important that they are made to contribute to the resolution of the cladding crisis.

[Baroness Young of Old Scone (Lab) [V]]

The Minister did not answer the question raised by the noble Baroness, Lady Pinnock. Post-Grenfell surveys have revealed other fire-related defects such as flawed fire separation. The leaseholders in these properties suffer the same problems of the inability to sell, high remediation costs and rocketing or no insurance. Yet the Government seem to be leaving it to leaseholders, building owners or somebody unspecified to pursue action against those who made the errors and omissions in the past. This is not good enough. What will the Government do to help these non-cladding victims?

--- Later in debate ---

[Lord Greenhalgh (Con)]

I did refer to the fact that other building safety issues, beyond the external cladding system, were breaks on whether a fire continues to spread—they are not accelerants. The scope of our intervention is designed to deal with the biggest contributor to the life safety risk. We would look to building owners to step up where possible and help with the remediation of faulty building works. We have focused the additional grant funding on precisely that which is going to protect and save lives.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, it is certainly welcome that the Government have taken action on properties over 18 metres, but the great majority of tenants are in properties under that height. I refer to my declared interests, primarily that I am a former chair of the National Housing Federation, which represents housing providers. It has huge numbers of tenants who have bought shared ownership properties, who are not well off and are currently in enormous difficulties. This is because, despite what has been said by the Government and RICS about EWS1 inspections and the flexibility around them, lenders are continuing to insist on EWS1 inspections in practice. These home owners are not well off, and inspections everywhere are getting valuations of £0, serious delays and uncertainty. Will the Minister speak to lenders about resolving this issue? Would he also accept that a bill of £50 a month is unaffordable for those in shared ownership, given that the reason they are in these properties in the first place is that they are not able to afford a home otherwise?

[Lord Greenhalgh (Con)]

My Lords, we have spoken to lenders and there were positive statements by Barclays and the chief executive of Nationwide in the announcements. They welcomed this and recognised that the additional £3.5 billion helps to provide certainty, admittedly in high rises. The financing scheme remains open to all, both social sector and private sector leaseholders, to ensure that they would not have to pay more than £50 a month towards the remediation of unsafe cladding. In the round, the announcements we have made will give confidence to the market to be more sensible on valuation in future, I hope.

[Lord Moynihan (Con) [V]]

My Lords, this Statement is welcome as an important contribution to the absolute priority of safety in our housing stock and building back better. Will my noble friend consider expanding the remit of the building safety regulator to whom he has just referred to take into consideration the need to continue to upgrade the least efficient social housing stock, reduce carbon emissions and bills, tackle fuel poverty and save the budget to help 600,000 households reduce carbon emissions by subsidising the costs of energy efficiency? All these have an impact on safety.

[Lord Greenhalgh (Con)]

I thank my noble friend for raising the issue of how we can ensure that we achieve our zero-carbon commitment. The building safety regulator has oversight of building control bodies and monitors their performance. We hope that oversight will improve the efficacy of building regulations across the board. I point out that climate change mitigation and adaptation are intrinsic components of building regulations and will remain so.

[Baroness Whitaker (Lab) [V]]

My Lords, some people need a different kind of safety guarantee. Will the Minister condemn recent death threats, including a petrol can left next to a property belonging to a Romany Gypsy mother of two going through cancer treatment and in the process of applying for planning permission for new housing?

[Lord Greenhalgh (Con)]

I will join the noble Baroness in condemning all such abhorrent incidences of hate crime. Hate crimes like that are completely unacceptable and will not be tolerated under any circumstances. My department has been informed that both the local authority and local police are dealing with the incident. As the police are investigating the specific matter she raised, it would be inappropriate for me to comment any further at this point. I am sure that she will understand that, as I would not want to prejudice their work.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Greenhalgh Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

[Baroness Pinnock (LD) [V]]

My Lords, I remind the Committee of my interests, as recorded in the register, as a member of Kirklees Council and a vice-chair of the Local Government Association.

The debate on these amendments has been a relatively short but, I trust, helpful for the Government. As we have heard from my noble friend Lady Thornhill, and the noble Lords, Lord Kennedy and Lord Bourne, to cover the cross-party contributions to this debate, there are significant concerns about the timing of the assessment—or the antecedent valuation date, to give it its official title—of new rateable values. Some have experienced enormous challenges over the last year, none of which are of their making. The challenges of the pandemic have brought large parts of the hospitality and retail sectors to their knees. Now is not the time to undertake an assessment of rental values, which is in large part the basis of the valuation.

Will the Minister agree to discuss with the department the possibility of a delay to the AVD? This concern is at the heart of the amendment in my name and that of my noble friend Lady Thornhill. A six-month review would establish whether it is practicable to assess new rental values that feed into the final valuation. A delay is preferable but, failing that, a review is essential as it would highlight the difficulties of doing this while a pandemic is rife. The concerns from those of us who have had extensive local government experience is that local authority finances will be adversely impacted. Of course, the Government have given assurances that any loss of income from business rates will be fully compensated—at the moment. However, they have not, as yet, given such a commitment for when the revaluation comes live in 2023. Will the Minister provide copper-bottomed assurance that no local authority will lose income from the revaluation, and that any necessary top-ups will be provided? I look forward to the Minister’s response to these questions, which will inform any amendments to be tabled at Report.

As we discussed at Second Reading, the Government have chosen a particularly inopportune time for the revaluation of business rates. The valuation day is set for April of this year, and I urge the Minister to consider delaying the date and accepting the proposal in both these amendments. I look forward to his reply.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, I first point out my residential and commercial property interests as set out in the register.

I am grateful to the noble Lord, Lord Kennedy, for raising the points highlighted by his proposed new clause. The business rates system is unusual among taxes because its implementation is split between the Valuation Office Agency, which is an agency of HMRC, and local authorities. Many noble Lords have, like myself, experience of working in local government and know and understand how important the relationship is between the VOA, local authorities and my department in running the business rates system.

As the Committee would expect, one of the issues raised in our discussions with local government has been how revaluations impact on local government funding, so I am grateful to the noble Baronesses, Lady Pinnock and Lady Thornhill, for tabling their amendment on that subject.

In relation to the provisions of this Bill, we have worked closely with the VOA to ensure that a revaluation in 2023 can be delivered on time. The antecedent valuation date of 1 April 2021 was set by a statutory instrument laid on 6 August last year, since when the VOA has been preparing for the revaluation. It has already started to collect the information it needs to value 2 million properties and is on target to complete the exercise to plan.

As I discussed at Second Reading, Clause 1 also moves back the latest date by when the draft rating list must be published before the revaluation to no later than the preceding 31 December. In practice, we expect this to be around the time of the autumn fiscal event, when the multiplier and the transitional relief scheme are also announced. That will mean that rating lists will come to local government a little later than previous revaluations, but we do not expect this to mean any delays in the process of billing or estimating business rates income.

Local government of course needs the multipliers and details of relief schemes before it can calculate liabilities, and it is only once that full package is confirmed that bills can be issued. That is the case whether we are in the year of a revaluation or not. Nevertheless, I can assure my noble friend Lord Bourne and the Committee that my officials meet representatives of local government regularly and will continue to discuss these matters with them to ensure the smooth delivery of business rates bills.

More generally, my department and the VOA are continuously looking at how we can improve consultation and closer working with local government. In recent years the VOA has introduced a data gateway under which it is able to share information about ratepayers with local authorities in order to support the billing process, and last year we made regulations empowering local authorities to provide the VOA with information on a quarterly basis about the properties that ratepayers occupy. This was introduced with the support of local government and will ensure that the VOA has up-to-date information ahead of 1 April 2021, which is the intended valuation date for the 2023 revaluation.

One specific matter we have discussed with local government is how to reflect in the local government finance system the changes in business rates income at revaluation—and I recognise that this is the matter on which the noble Baronesses, Lady Pinnock and Lady Thornhill, seek reassurance through their amendment. The purpose of the revaluation is to ensure that business rates bills reflect the up-to-date rental value of properties.

This of course means that some ratepayers will see increases and some will see reductions as a result of the revaluation, and it follows that the business rates income for individual local authorities will fluctuate in the same way. Some local authorities will see their business rates income rise at the revaluation and others will see it fall. Between revaluations, local authorities can increase their business rates income by supporting growth and investing in their area. Their share of this type of growth is retained by them through the rates retention scheme.

In contrast, the changes we see in local authority income levels at the revaluation come mainly from the trends and variations in the wider national economy and the commercial property market. These factors are largely outside the control of individual local authorities and the Government’s view is that such changes in business rates income levels at the revaluation should not feed through into local government budgets.

Therefore, our intention—as it was at the previous revaluation in 2017—is that we will, as far as is practicable, ensure that retained rates income for individual local authorities under the business rates retention scheme is unaffected by the 2023 revaluation. For the 2017 revaluation we achieved this by adjusting the tariffs and top-ups in the scheme to reflect the change in income at the revaluation. We consulted local government on the mechanics of these adjustments from as early as the preceding summer. This was a collaborative process and one which we intend to repeat for the 2023 revaluation. This process will give local authorities the budget assurances they need regarding revaluation. As such, the timing of the revaluation and how it affects the distribution of business rates income should not impact directly on local government finances.

I hope, therefore, that I have reassured the Committee on the degree to which my department and the VOA work closely together and in partnership with local government on business rates matters, and on the steps we will take to protect local government finances at the time of the revaluation. These working relationships are important, and we are indebted to those in local government who offer their time and expertise to support us in running and improving the rating system.

I hope that, with these assurances, the noble Lord, Lord Kennedy, and the noble Baronesses, Lady Pinnock and Lady Thornhill, will agree not to press their amendments.

[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

I have received no requests to speak after the Minister, so I call the noble Lord, Lord Kennedy of Southwark.

--- Later in debate ---

[Baroness Pinnock (LD) [V]]

My Lords, this group of amendments relates to the impact of the timing of business rate revaluations on the retail sector and, hence, the future of our town and city centres. In the first group of amendments, we discussed the timing in general terms, but my colleagues and I ask the Government to fully consider the implications of a revaluation on business profitability and survival.

For many small businesses, business rates are a significant overhead, along with the rent for the property. As my noble friend Lord Stunell reminded us, the Government’s original intention was to have a revaluation assessment in 2019, but this was moved because of negative forces affecting retailers. That negative impact has not gone away, as he said. We support the relief provided by the Government as part of their Covid response, but these are very uncertain times. This Bill proposes to push back the date on which the multiplier is announced from the September to the December prior to the new valuations coming live—in this instance, it means an announcement in December 2022. This will give businesses just three months to analyse the implications for them of the new rates bill they will be paying from April 2023. The amendment in my name and that of my noble friend Lord Stunell would enable the Government to consider the consequences of the new valuation for particular business sectors and particular regions before the multiplier was determined. An impact assessment would have to consider all the angles of the proposal and would throw light on the effect of the revaluation. It is a positive amendment which would help the Government get to a fair outcome in the revaluation of business rates.

As the Minister will know, in 1990, when the system was created, the multiplier was 34.8%. In 2020, that had risen to 51.2% for large businesses and just under 50% for small businesses. The multiplier is a crucial factor in the final business rate bill. The consumer prices index is the relevant figure used for the multiplier. Does the Minister think it is now time to reconsider the level of the multiplier? I suspect that the answer to my question will be that we should wait for the business rate review that the Government constantly promise. That will give no comfort to businesses, who will know from this Bill that they are expected to pay business rates under this outmoded scheme for at least another five years. There is obviously an effect on the profitability of individual businesses, but there is also the cumulative effect on town and city centres. As the noble Lord, Lord Kennedy, reminded us, one in 10 shops currently lies empty.

The revaluation is just one of the uncertainties that businesses are having to grapple with. The town centre funds and high-street funds that the Government have announced are all well and good, but they just paper over the cracks while the main issues affecting business survival are largely ignored in policy definition and implementation.

My noble friend Lord Addington and the noble Lord, Lord Moynihan, have raised an issue close to their hearts: the effect of business rates on amateur sports clubs. Both were right to do so and made the case with knowledge, experience, and powerful arguments which we fully support. Every community will have an amateur sporting activity at its heart, one that provides enjoyment and an opportunity to develop skills and teamwork through physical activity. They are vital ingredients of a healthy community. I urge the Minister to take note of the arguments made and come to Report with a proposal for action to help amateur sports clubs. I look forward to his response on all the points made.

[Lord Greenhalgh (Con)]

My Lords, this group of amendments allows us to consider the impact of the 2023 revaluation on rates bills, the multiplier and, specifically, our high streets, town centres and amateur sports clubs. Understandably the Committee, businesses and all ratepayers would like to know how the 2023 revaluation will affect rates bills. However, it will be some time before we know that. The carrying out of a business rate revaluation is a significant exercise which requires the careful application of the considerable expertise within the Valuation Office Agency. The two-year gap between the date on which valuations will be based, 1 April this year, and the date on which the next revaluation will be implemented, 1 April 2023, is necessary to ensure accurate rateable values. For this reason, we will not know the result of the revaluation until much later, in 2022. The Government will not therefore be in a position to make an assessment of the next revaluation in respect of any specific sector or the rating list as a whole within six months of the Bill receiving Royal Assent, as is sought by some of these amendments.

However, I can say that, once enacted, the Bill will ensure that business rate bills from 1 April 2023 will be based on rental values as of 1 April 2021. This means that the business rates due on properties based on our high streets and in our town centres or in the leisure sector will be up to date and better reflect the impact of the pandemic.

Certainly, an important part of rates bills when we reach the 2023 revaluation will be the level of the business rate multiplier. It may help the Committee if I explain more about the process of setting the multipliers for 2023-24. As with all years, we are required to finalise the multipliers as soon as reasonably practicable after the local government finance report has been approved, normally in February. For example, at the last revaluation in 2017, the multipliers were confirmed on 9 March. Therefore, we expect to finalise the multipliers for 2023-24 in late February or early March 2023. In contrast, the new rating lists will not be compiled until 1 April 2023. Therefore, it would not be possible to publish the assessment sought in the amendment proposed by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, before the multiplier was confirmed but after the list had been compiled.

Nevertheless, I appreciate of course that noble Lords and businesses will want to understand the impact of the revaluation as early as possible and before the multipliers are confirmed. In practice, we will announce provisional multipliers and the transitional relief scheme much earlier in the process, at the time of the autumn fiscal event.

It is our intention at the same time to publish the entire draft rating list. This means that, as well as being able to see the sectoral or regional impact of the revaluation, individual ratepayers, be they on the high street or in the sports sector, will be able to check their own rateable value and calculate their own rates bill. This will give an overall picture of the revaluation and allow ratepayers several months’ warning of their new rates bills.

I point out to the noble Baroness, Lady Pinnock, that the process of setting the multipliers is controlled largely by rules in legislation. We are required to make an adjustment to the multipliers for 2023-24 to offset the estimated change in total rateable value due to the revaluation after allowing for inflation and forecasted future appeals. It is that adjustment which drives the level of the multipliers in 2023-24.

We cannot by law set multipliers higher than that calculated from the adjustment. The Chancellor may by order set a lower multiplier, however. Noble Lords will understand that that is a fiscal matter decided by the Treasury as part of the normal Budget process, balancing the pressures on businesses with the need to fund vital local services, but I assure the Committee that the Government will have full regard to the impact of the revaluation before deciding whether to exercise that power and set a lower multiplier.

Our town and city centres are important hubs of our communities, and I am proud of the steps that the Government have taken to support this crucial part of our economy. While this Bill represents a postponing of the next revaluation, I know from the comments made at Second Reading that noble Lords appreciate that this is a step taken in the exceptional circumstances of the pandemic. However, as I have said, once we reach 2023, the new rateable values will better reflect the impact of the pandemic on rental values in locations such as the high street.

--- Later in debate ---

[Lord Stunell (LD) [V]]

My Lords, it is a privilege to speak after the noble Lord, Lord Thurlow, because he has more or less stolen my thunder, which means I can be really quite brief. He outlined very clearly a common thread in all the debates so far today: the absolute urgency of getting this problem fixed. We all know that it needs a longer-term fix, with a complete overhaul of the system, but, if we are to stay where we are with the current system unamended while we wait for that golden day of amazing reform, I fear that many businesses in the country will collapse and fail, not just in the high streets, but, as the noble Lord, Lord Thurlow, so elegantly and persuasively said, in the office sector and elsewhere. Something has to be done in the meantime—which, of course, was the burden of some of the earlier debates.

The point of the amendment and the impact review is to challenge the Government by saying that what they propose to do—or, perhaps more accurately, what they propose not to do—will leave many businesses in profound despair about how they will manage in the next 18 months or two years. It is obvious that many people will appeal. The number of appeals will be large, not small, and if we start with a backlog from the previous system, that will get worse still.

My noble friend Lady Bakewell asked the Minister some piercing questions that I hope he will respond to about the efforts being made to train panels and find the expert support needed to get the appeals in the system moving through at a proper level. What about the waiting times? Is the Minister, or indeed the VOA, setting a target to deal with this backlog to make sure that it does not pile up behind the new unfolding situation? The noble Lord, Lord Kennedy, has already pointed out the 40,000 appeals. I know that some of those are very specific to one or two topics, but that is not quite the point: one or two specific topics might crop up in this round of appeals and this revaluation that will cause similar problems.

So I strongly support the thrust of the amendment and I believe that we do need an impact assessment. We need some positive action from the Government and I look forward to hearing how the Minister proposes that that should happen.

[Lord Greenhalgh (Con)]

My Lords, this proposed new clause would require the Secretary of State to publish an assessment of the impact of the Act on the appeals waiting lists. The Government recognise the importance for businesses and local government of having an effective appeals system. The process we have put in place allows ratepayers to understand how their rateable values have been assessed and how to challenge those valuations where they feel that is necessary. Of course, changes to the revaluation cycle can impact on the appeals process, so I welcome the opportunity to consider this through the amendment.

I will first explain the system for appealing rateable values. The Government introduced the check, challenge, appeal system in 2017, known as CCA, because the previous system was failing. Over 1 million cases were received from ratepayers on the 2010 rating list. Many were submitted with little or no evidence and around 70% of Valuation Office Agency appeals resulted in no change. This delayed the VOA’s ability to deal effectively with well-founded cases.

The CCA system introduced a new “check” stage, at which ratepayers must first check and confirm the details of their property. This ensures that factual matters are resolved without any further action. At the next stage, “challenge”, the ratepayer must set out the basis of their case. This provides that only substantive cases progress into the system to be considered by the VOA. The final stage, “appeal”, allows the ratepayer access to the independent Valuation Tribunal, but only where they have exhausted discussions with the VOA. The amendment as drafted is concerned only with the last stage, “appeal”, but I trust that the Committee will want me to discuss more generally the CCA system.

By March 2020, the VOA’s CCA system had been showing modest volumes: around 158,000 checks and only 31,000 challenges. Of course, the pandemic has increased these numbers, and as of 31 December 2020 the VOA had registered over 440,000 checks and over 90,000 challenges. Of these, the VOA has resolved over 400,000 checks and 24,000 challenges.

Nevertheless, I know that some ratepayers and agents have concerns about how CCA operates. The Government acknowledge the issues ratepayers faced when CCA launched, particularly with the software and the use of the system. However, the VOA has improved, and continues to improve, its service for ratepayers. This includes changes to enable CCA users to submit multiple property claims, as well as improvements to the registration process to make it simpler and quicker to register.

In February last year my department published an interim review of the CCA system. Although we recognised that it was still too early to fully judge the system, the review concluded that the reforms were helping to reduce the number of speculative appeals and to improve engagement between ratepayers and the VOA.

I know that noble Lords are also concerned with a number of cases—around 50,000—that have been outstanding for longer from the 2010 rating list. In fact, the majority of the 2010 appeal backlog cases concern ATMs and were stayed pending the outcome of a Supreme Court case. So these cases did not impact on most businesses and the delay was largely outside the VOA’s control. The Supreme Court issued a decision on this matter on 20 May 2020 and I can assure noble Lords that these outstanding 2010 cases are now being settled quickly.

As the amendment we are considering highlights, the CCA process is, of course, affected by the frequency of revaluations. Looking specifically at the Bill’s provisions, to ensure that rateable values better reflect the impact of the pandemic, the Bill will move back the next revaluation to 2023. This of course will give the VOA and the Valuation Tribunal at least an extra year to clear cases on the 2017 rating list ahead of the next revaluation.

More generally, as I set out at Second Reading, the Government are undertaking a fundamental review of business rates. This includes a commitment to look at more frequent revaluations, and we would need an appeals system which supported that. The fundamental review will therefore also examine what reforms might be necessary to the CCA system to support more frequent revaluations.

The call for evidence on the review was published in July and asked respondents to provide proposals for changes to each stage of CCA to improve the system, while recognising ratepayers’ desire for a quicker resolution of cases and greater transparency. The Government are currently considering the responses to the call for evidence, and the review will conclude in spring 2021.

I hope that I have been able to reassure your Lordships about the importance that we place on delivering an effective, functioning appeals system that resolves cases in a timely manner. The proposed new clause raises important questions about appeals and the frequency of revaluations, which the Government are already fully considering as part of the fundamental review. I hope that, with those assurances, the noble Lord, Lord Kennedy, can agree to withdraw the amendment.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, Amendment 4, moved by the noble Baroness, Lady Pinnock, seeks to insert a new clause into the Bill which, as we have heard, would require an impact assessment of the timing of rates revaluations on local high streets and, importantly, would look at the impact on their ability to compete with businesses that operate online.

We have a serious problem with our high streets. The problem was in many cases a crisis before the pandemic, as we have discussed today on previous amendments. We can all point to the closed and boarded-up shops in areas that we know. The pandemic has created an even more serious problem for high streets and has put many businesses at risk. We need action from the Government to deal with all the issues that are destroying our high streets and our shopping parades.

We will all have seen the news that Boohoo is purchasing Debenhams and that ASOS is purchasing Topshop, but they are purchasing the names and not continuing with their high street presence. Why they are doing that is the question we need to look at. Clearly, they have taken the view that they do not need, or that it is too expensive to operate, a high street presence. This is why urgent action is needed. The issue with online retailers needs to be addressed. It has been discussed in the other place. My honourable friend the Member for Manchester Central, Lucy Powell MP, has said:

“The pandemic has accelerated changes to the way we shop, yet the government continues to disadvantage bricks and mortar businesses against online companies … The support on offer for struggling business has been a series of sticking plasters. Unless the Government puts in place a long-term plan to help high street businesses survive this crisis and recover on the other side, we will see more well-loved high street names vanishing, and many more jobs lost.”


I could not agree more. I also agree with the noble Lord, Lord Thurlow, that we need vibrant, healthy town centres. As he said, the power to help the high street is in the hands of the Government. I hope the Minister will address that point.

[Lord Greenhalgh (Con)]

My Lords, I am grateful to the noble Baroness, Lady Pinnock, and the noble Lord, Lord Shipley, for a further opportunity to speak about our high streets. As I outlined when we debated the second group of amendments today, we will not know the impact of the revaluation on rates bills until later in 2022, so it would not be possible to produce now the report outlined in the amendment we are discussing. However, we can be sure that, once we publish draft rateable values alongside the multiplier and the transitional relief scheme later in 2022, ratepayers will be able to see precisely how revaluation will affect their rates bills.

The noble Baroness, Lady Pinnock, raised an important point about online businesses compared to those that operate on the high street. Businesses which sell mainly or wholly online do not avoid business rates. They may also operate shops—many high street retailers also sell online—and they will require significant warehouse and distribution facilities, often in high-value locations. Nevertheless, business rates are a tax on the use of property and the rates bill is based on the value of the property. It follows that business models that occupy less property and perhaps operate from less valuable locations will pay less in business rates.

Property taxes have several key advantages over other forms of business taxation: they are relatively efficient to collect, they provide a relatively stable source of revenue to local government that helps ensure the provision of essential public services, and they provide relative certainty for ratepayers from one year to the next. However, there is undoubtedly a click-and-collect revolution, as outlined by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Kennedy. The Treasury’s fundamental review of business rates is considering alternatives taxes, including a potential online sales tax. The review will need to consider matters such as the economic impacts of such a tax and assess the concerns and risks that have been raised in the call for evidence.

Supporting the high street is a priority for us. In this year alone, no retailer on the high street is paying business rates. With the assurance that the matter of online business is being considered as part of the fundamental review and the updating of rateable values to better reflect the impact of the pandemic which will come from the 2023 revaluation, I hope that the noble Baroness, Lady Pinnock, and the noble Lord, Lord Shipley, can agree to withdraw their amendment.

[Baroness Pinnock (LD) [V]]

My Lords, I thank all noble Lords for their contribution to this short but very important debate. The noble Lord, Lord Thurlow, has stressed again the nigh impossibility of assessing rental values in the current climate. I hope the Minister will discuss with his department how rental values are to be assessed while the pandemic is rife.

My noble friend Lord Shipley reminded the Government of the potential of an online tax to create a level playing field for all retailers. I thank the noble Lord, Lord Kennedy, for his support. All noble Lords who have spoken have emphasised the urgency of responding to the situation facing our high street retailers. A revolutionary reform is needed. How much longer are online businesses to escape a fair assessment, compared with physical retailers? I am pleased that the Minister has just said that the Government are considering online taxes in the business rates reform, but I remind him that town centres cannot wait much longer. I beg leave to withdraw the amendment.

No-fault Evictions

Lord Greenhalgh Excerpts

Wednesday 27th January 2021 Lords Chamber

[Baroness Grender]

To ask Her Majesty’s Government what progress they have made towards preparing the legislation to end “no fault” evictions announced in the Queen’s Speech on 19 December 2019.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, we remain committed to abolishing Section 21 of the Housing Act 1988 to enhance renter security and improve protection for tenants. However, our collective efforts are currently focused on responding to the coronavirus outbreak. We will bring forward a renters’ reform Bill once the urgencies of responding to the pandemic have passed and when parliamentary time allows.

[Baroness Grender (LD) [V]]

My Lords, by all metrics, tenants started this pandemic with less savings and have lost more jobs and income than property owners, but the Government, in the name of balance, have made the callous move of including arrears accrued during the pandemic as grounds for eviction. They have therefore broken the promise that loss of income will not mean the loss of a home. Can the Minister share the data used to guide this decision? If it is not available, will he please write to me?

[Lord Greenhalgh (Con)]

Given the significant level of financial support that has been available to renters throughout the pandemic, through furlough and welfare, it is unlikely that this expansion of rent arrears would have accumulated solely through Covid-related arrears. I point out the Citizens Advice data that 250,000 renters owe landlords some £360 million.

[Lord McNicol of West Kilbride (Lab)]

My Lords, Generation Rent analysis states that:

“Section 21 is the leading cause of statutory homelessness.”


The report continues, saying that

“92% of the rise in homelessness cases … in London can be explained by no-fault evictions”.

However, turning to the immediate, the Government’s ban on bailiff enforcement of eviction ends on 21 February and does not extend to renters in more than six months of arrears. What plans, if any, do Her Majesty’s Government have to revisit these two very important issues?

[Lord Greenhalgh (Con)]

I point out that the new court rules will certainly prioritise cases such as anti-social behaviour, and that bailiffs do not currently enforce evictions. There have been plenty of protections for tenants throughout this pandemic, and those protections continue. It is important to get a balance between protecting tenants and providing the rights to landlords.

[Lord Truscott (Ind Lab) [V]]

My Lords, I refer to my interests in the register. I support the ending of no-fault evictions and believe that the tenant should receive extra support during the pandemic and the current lockdown. The Minister will know that very many private landlords own just one or two properties. Can he say what the grounds for repossession would be should the landlord need to reoccupy their home or sell for financial reasons?

[Lord Greenhalgh (Con)]

I will have to write on that specific point. It is important that this is seen as a balance of strengthening the rights for eviction while removing the no-fault eviction.

[Baroness Eaton (Con) [V]]

I declare my interests as recorded in the register. As part of a renters’ reform Bill, the Government have committed to improving the court process for landlords to make it quicker and easier for them to get their property back where they have a legitimate reason for doing so. Given this, when will Ministers publish their response to the consultation, Considering the case for a Housing Court, which closed over two years ago?

[Lord Greenhalgh (Con)]

I will have to respond to the noble Baroness in writing on the point about the housing board.

[Baroness Walmsley (LD) [V]]

My Lords, campaigners have asked for a coronavirus home retention scheme of £750 million in support to be made available to help renters in arrears, recover loss of income and avoid rent debt. Have the Government conducted a cost-benefit analysis comparing such a fund with the potential cost of making many families homeless because of rent arrears?

[Lord Greenhalgh (Con)]

I am not specifically aware of such a cost-benefit analysis, but we will certainly look into that as we develop policy in this area.

[Baroness Altmann (Con) [V]]

My Lords, I declare my interests as in the register. Does my noble friend agree that tenants must have confidence that their landlords will treat them properly, but that the law should not penalise landlords unfairly—most of whom are responsible, have only one or two properties and may have lost significant amounts of rental income in the pandemic? I agree that we must be careful not to give unbalanced rights to tenants to occupy indefinitely—for example, if their landlord needs to sell or move in themselves.

[Lord Greenhalgh (Con)]

My Lords, it is very important that, when we remove the ability to evict someone through no-fault evictions and Section 21, we also strengthen the rights where there are specific grounds for eviction. That is the nature of the tenancy reform and the Bill that we will bring before the House.

[Lord Best (CB) [V]]

My Lords, the Government are definitely doing the right thing in giving renters greater security. But is there a problem that a rogue landlord could simply double the rent, thereby forcing the tenant to leave despite the extra security? Would the Minister agree that the forthcoming renters’ reform Bill will need to introduce not clumsy rent controls but a straightforward time period—perhaps four years—during which a tenant’s rent cannot be increased by more than inflation?

[Lord Greenhalgh (Con)]

My Lords, I will look at what it will take to ensure that there are proper securities for renters, while recognising that we also need a healthy private rental sector and the role that good landlords play in that process.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I refer the House to my relevant interests as set out in the register. In March 2020, the Government made a commitment that no renter would lose their home due to coronavirus. Can the Minister tell the House how ending the evictions ban aids that commitment?

[Lord Greenhalgh (Con)]

I point out that billions have been provided in welfare support. In addition, raising the local housing allowance of the lowest 30th percentile is adding nearly another £1 billion of support—some £600 of support to people—in the private rental sector. There is a great deal of support in addition to the discretionary housing payments. All of this shows that we are committed to supporting renters at this time, but we need to get the balance, with support for landlords.

[Baroness Bowles of Berkhamsted (LD) [V]]

I declare my interests as in the register. It seems that the eviction moratorium had benefits in Covid prevention interests as well as, or perhaps even more than, the interests of renters or landlords. Given that public interest aspect, is it not incumbent on the Government to try to provide a solution to the rent arrears, especially for those—of whom there are quite a few—who have been ineligible for the other types of support?

[Lord Greenhalgh (Con)]

My Lords, I am not really sure how the Government can solve the issue of rent arrears. We have just discovered the £360 million in rent arrears calculated by Citizens Advice. The most important thing is, where a landlord faces a tenant not paying their rent and where there is a level of egregious rent arrears caused not just by the pandemic, they are able to evict the tenant.

[Lord Bird (CB)]

Is there not a very simple way of accepting the fact that, if we pay the rent of people in this period, we can look at the knock-on effect at a particular time? For anybody who slips into homelessness, the cost will double, and sometimes treble. We know the evil cost of homelessness, and it would be much more sensible if we said, “Okay, all we are going to do is pay your rent, pay your arrears and spend to save”.

[Lord Greenhalgh (Con)]

My Lords, I would argue that the furlough scheme and the support we have given in billions in welfare, in addition to the commitment towards homelessness, which is increasing from £700 million this year to £750 million, is precisely the sort of leadership the Government are providing to support people to remain settled in accommodation and take rough sleepers off our streets.

[Baroness Gardner of Parkes (Con) [V]]

My Lords, I declare my interests as in the register. The Citizens Advice survey found that 46% of tenants who make a complaint are then evicted by their landlord using Section 21—the no-fault eviction power. Can the Government find the time to deal with this very real problem through some form of legislation due before this House, whether in its own Bill or by piggybacking the relevant clauses into another Bill, as this is now even more pressing in this coronavirus and lockdown era? People, particularly families, have more than enough to cope with at the moment, and need to know that they have a safe and secure roof over their heads.

[Lord Greenhalgh (Con)]

My Lords, I point out that there is a firm commitment to the abolition of Section 21, while strengthening the powers to evict on other grounds. That reform will come forward when parliamentary time allows.

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

My Lords, all supplementary questions have been asked, and we now move to the third Oral Question.

Housebuilding

Lord Greenhalgh Excerpts

Tuesday 26th January 2021 Lords Chamber

[Lord Roberts of Llandudno]

To ask Her Majesty’s Government what plans they have to increase the number of houses being built.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, I point to my residential and commercial interests as set out in the register. The Government are committed to supporting the supply of new homes; we delivered around 244,000 last year, the highest number in more than 30 years. We are bringing forward an ambitious nearly £20 billion investment that will include over £12 billion for affordable housing over five years and more than £7 billion to both unlock new land through the provision of infra- structure and to diversify the market through our national homebuilding fund. Alongside our reforms to the planning system, this will deliver the new homes the country needs.

[Lord Roberts of Llandudno (LD) (V)]

While I welcome what has been done, does the Minister agree that we need something on a much larger scale—a Beveridge-scale programme for new affordable housing? That would provide the jobs needed for those who have possibly lost their jobs because of the pandemic. I would also suggest that there should be a Minister at Cabinet level with just one job—a Minister for housing. We should also co-operate with the Ministers for housing in Belfast, Edinburgh and Cardiff. I hope that he will agree with that and help to put it into operation.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I would point out that housing is a devolved matter and I am not looking to tie the hands of the Prime Minister in how he prioritises this. I would also point out that we need to be very clear about the levers that the Government have to deliver new housing. The most important of those is the investment in infrastructure and the very substantial £12 billion commitment to affordable homes.

[The Archbishop of Canterbury (V)]

My Lords, I declare non-financial interests in various Church lands through numerous charities of which I am a member. The Church will be publishing a housing, church and communities report in February. Can the Minister tell us what criteria Her Majesty’s Government use to define affordable housing? Is it genuinely affordable in the sense that most people would use the word?

[Lord Greenhalgh (Con)]

The definition of “affordable” that we use is taxpayer-subsidised housing. Of course, that is council housing as well as housing association and social housing but, importantly, it is housing that takes you on a pathway to home ownership—so it is immediate housing that is also discounted by the taxpayer.

[Baroness Neville-Rolfe (Con) (V)]

My Lords, home ownership is a huge contributor to a prosperous and contented society, and I am glad to see the Minister’s focus on this. What is the gross number of new homes that were built last year? I am not sure about the basis for the figure of 244,000 that he mentioned. How many were in existing buildings such as pubs, offices or shops?

[Lord Greenhalgh (Con)]

My Lords, the gross figure for additional dwellings was 252,790. That figure was obtained by adding 243,770 net additional dwellings to 9,000 demolitions. Some 26,930 gains were made through change of use.

[Lord Best (CB) (V)]

I congratulate the most reverend Primate the Archbishop of Canterbury on his appointment of a Church of England bishop for housing; that is a most helpful move. Does the Minister agree that now is the time to accept the excellent recommendations made by Sir Oliver Letwin to get more homes built by ending our dependence on the oligopoly of major housebuilders who corner the land market and build out at a speed that suits themselves? Instead, we should capture the land value through local authorities and thus ensure the building simultaneously of a variety of new homes, including social housing and retirement housing and so on, for every major site.

[Lord Greenhalgh (Con)]

My Lords, there is a great deal of sense in that question. I would point out that the proposals to revise the National Planning Policy Framework make it clear that sites for substantial development should seek to include a variety of development types from different builders.

[Baroness Bakewell (Lab) (V)]

My Lords, many charitable housing providers such as almshouses—for which I am an ambassador—are very small and are not included with regulated social housing providers, so will the Government review Section 106 of the planning guidance to extend its benefits and allow almshouses and other charitable providers to extend their housing provision?

[Lord Greenhalgh (Con)]

The use of Section 106 is a very important driver of the delivery of affordable housing. Perhaps I might take that point away and respond in writing.

[Lord Hussain (LD) [V]]

My Lords, I am sure that the Minister is aware of many local authorities such as Luton—my home town—which do not have much building land within their own boundaries; their housing waiting lists continue to run into thousands. In order to meet local needs, can he tell us how the Government plan to help such local authorities acquire land from neighbouring councils to build much-needed affordable social housing?

[Lord Greenhalgh (Con)]

My Lords, I have pointed to a substantial amount of money—£12 billion—of which £11.2 billion is for the affordable homes programme. In addition, we have announced a new, £7.1 billion fund, which is designed to help precisely with land acquisition and to deal with the requisite infrastructure to enable the housing that the noble Lord describes.

[Lord Moylan (Con)]

My Lords, small and medium housebuilders who build most of the existing housing stock have practically ceased to exist in the last few decades, in part because of the cost, time and risk involved in obtaining planning permission. Does my noble friend agree that there is a case for exempting small builders developing small sites from the need for planning permission, subject only to a pre-published design code?

[Lord Greenhalgh (Con)]

My Lords, my noble friend is right that we are seeing the level of planning regulation deter small builders. It is important that, as part of our reform of the planning system, the Government take that into account and find ways to, let us say, level up the field to let the small players participate in the market and therefore deliver on the small sites the new homes that this country needs.

[Baroness Wilcox of Newport (Lab) [V]]

I speak as a vice-president of the LGA. With government targets continuously missed, the last time anywhere near 300,000 homes a year were built, councils contributed more than 40% of them. So the only way the Government could get back to building at this scale would be by supporting councils to build homes. What steps therefore are the Government taking to help local authorities build the homes they need to build?

[Lord Greenhalgh (Con)]

My Lords, achieving the highest housebuilding target in over 30 years is a credible achievement. There is no doubt that the 300,000 target will be stretching, particularly in the light of the national Covid emergency. We will rely on councils to build; we have released the constraints on local authority finance and the ability to borrow, as well as providing a huge £12.2 billion programme for affordable house- building.

[Lord Green of Deddington (CB) [V]]

My Lords, these questions have been focused entirely on the supply of housing, but the future demand for housing is surely a key aspect. Is the Minister aware of the latest ONS household projections for England? They show that, over the next 20 years, just over half the extra homes needed for our projected population growth will be the result of immigration; that is, nearly 300 new homes every day. Surely we need action on demand as well as on supply.

[Lord Greenhalgh (Con)]

My Lords, it is important that we think about both the demand and the supply of homes, but it is also important that we attract global talent to this country. It is about getting that right—but I am not the Minister for immigration policy.

[Baroness Eaton (Con) [V]]

My Lords, more than 1 million homes that have been given planning permission over the last decade are yet to be built. Does my noble friend agree that, for the Government to meet their aspirations on the number of new homes being built, giving councils tools to encourage developers to build on sites with permission would enable building in a swift and timely manner?

[Lord Greenhalgh (Con)]

My noble friend will know that the Government want to see new homes built faster and to a higher-quality standard. Our planning White Paper proposes to introduce more speed and certainty into the planning system through the granting of automatic outline consents for growth areas. This will ensure that developers, authorities and communities can have greater clarity at an early stage of the process and will reduce unnecessary delays as those developments progress.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allowed for this Question has elapsed. We now come to the second Oral Question.