Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Lord Greenhalgh Excerpts

3rd reading
Wednesday 8th December 2021 Lords Chamber

Moved by

[Lord Greenhalgh]

That the Bill do now pass.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, it is a pleasure to see this Bill through to its conclusion.

The pandemic has had far-reaching and unexpected impacts and the business rates part of this Bill seeks to address its potentially distortive effects on the rating system and local government income. By clarifying that coronavirus and the Government’s response to it will not be considered a “material change of circumstances” for the purpose of property valuation, the Bill ensures that the rating system will continue to operate as it was intended to. It also removes a significant source of uncertainty for local councils.

I thank noble Lords for the engagement we have had during the passage of the Bill. We have sought to strike the right balance between getting this important measure passed quickly and leaving space for legitimate discussion on the wider issues at play, for instance the future of business rates. Considerable expertise has been in evidence, which will be of great value when we come to debate the more substantial changes that the Government have announced. In particular, I thank the noble Baronesses, Lady Blake and Lady Pinnock, for their careful scrutiny and, ultimately, the very welcome support they have offered.

The new power to investigate the conduct of former directors of dissolved companies and seek to disqualify them where appropriate will have far-reaching benefits to the economy, in terms of improved confidence in lending, and to business and the wider public, in protecting them from the actions of rogue directors.

Of course, there is the very pressing matter of ensuring that the Government have the tools they need to tackle those reprehensible individuals who have taken advantage of a public health crisis to line their own pockets, and this new measure will play its part in bringing them to task. I am sure noble Lords will agree with me that it is only right that the retrospective provision in this measure will mean that the investigation of those individuals may start immediately upon Royal Assent.

As well as the noble Baronesses, I extend my thanks to the noble Lord, Lord Fox, and my noble friend Lord Leigh, who have provided thoughtful and constructive contributions to the debate on the director disqualification part of this Bill. Finally, I thank the Bill teams in the Department for Levelling Up, Housing and Communities, and the Insolvency Service for bringing me up to speed on some of the more detailed provisions and helping me get a proper understanding of the Bill. I beg to move that this Bill do now pass.

[Baroness Blake of Leeds (Lab)]

My Lords, it is fair to say that there has been some significant consternation from noble Lords at the way this Bill was initially put together. However, in the main, we support its passage to get help to those in serious need.

We expressed our ongoing concerns at different stages of this Bill. It is obvious that the whole area of business rates needs urgent review and root-and-branch reform. Likewise, enormous concerns remain as to whether the Insolvency Service is sufficiently resourced to meet its obligations under the Bill with regard to the significant increase in business, as outlined.

I put on record my appreciation of the informed contributions from the noble Lords, Lord Fox and Lord Leigh, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock. I thank my noble friends Lord Hunt and Lord Sikka for their invaluable insights and knowledge on these matters.

From these Benches, we express our gratitude to the Bill team, the clerks and the staff of the House, and the Insolvency Service for the in-depth briefings it provided. I also thank both Ministers involved in this Bill: first, the noble Lord, Lord Greenhalgh—I particularly acknowledge the further detailed investigation he went into when the cause of our concerns over the business rates issue came to light—and the noble Lord, Lord Callanan, for his continued courtesy in offering regular briefings from his team and the insolvency support service on the various matters under consideration.

Finally, I thank both Ben Wood and Dan Harris, our excellent advisers, for their unfailingly high standard of support throughout the proceedings.

Clearly, both matters leave further work to be undertaken in both Houses, as has been outlined. I will watch the implementation of provisions with great interest.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Lord Greenhalgh Excerpts

Report stage
Wednesday 1st December 2021 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I want to add my comments on Amendment 2. I remind the House of my interests: I advise SME businesses and am also a landlord.

Increasingly, a number of people that I talk to, specifically in the retail sector, are very concerned that the Government are not listening to their concerns in respect of rates. Over the last 18 months, a number of companies have gone through CVAs. As a result of those CVAs, they have entered into turnover-based rents with landlords, enabling them to carry on trading from particular locations. But the size of the rates has meant that, despite having turnover rents, they are not able to carry on trading from retail premises, specifically because of the rates; more importantly, they are not able to open new locations that would otherwise be economically viable because of turnover rents, specifically because of rates.

I do not expect my noble friend the Minister to answer these concerns in this debate on this amendment, but business, particularly the retail sector, would like it acknowledged that the Government are aware of, focused on and planning steps to address this issue.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

I thank noble Lords for raising two important issues. The noble Baroness, Lady Pinnock, asked whether we will have data to know whether the £1.5 billion is enough and that we are not short-changing local government in any way. The noble Baroness, Lady Blake of Leeds, wanted to know about the future of business rates reform, given that we are seeing the economy shift to online and that many bricks-and-mortar businesses are struggling to pay their rates bills. I will try to address those points in turn.

I can give the noble Baroness, Lady Pinnock, some assurance on the availability of VOA statistics, which tell us about the adequacy of the Government’s support. During 2022, the VOA will provide new data specifically marking out Covid-related MCCs but, even in the existing data sets, we can get an insight into the nature of these cases. I quote more recent figures from October: as of 30 September 2021, 63,780 challenges were outstanding in England, the vast majority of which are on hold pending this Bill. Far more challenges could come forward from ratepayers who have already made checks—a check being the first stage in appealing the rateable value of one’s property. In the period since April 2020, the VOA has received more than 400,000 checks. So, there is a wealth of statistical evidence out there and it will be enhanced next year. This evidence cautions against any suggestion that we should introduce a like-for-like compensation for Covid-related reductions in rateable value, which, on account of this Bill, will rightly not materialise. That was never the intention, and we should not seek to create an equivalence.

On the point made by my noble friend Lord Leigh of Hurley and the noble Baroness, Lady Blake, we recognise that particular industries have been hit very hard by the pandemic. We have statistics on the drop in gross value added by industry, and there is a wide range of reductions by sector. That comes to the question of how we divide the £1.5 billion, which I will return to in the debate on the next group of amendments.

Let me give the Government’s most up-to-date position. Following the conclusion of the business rates review, the Government will shortly consult on measures arising from that review and seek to bring forward legislation in due course. The consultation was published only yesterday and explicitly anticipates future legislation to deliver major reforms. These include three-yearly revaluations, a major ask of ratepayers, support for property improvements and support for green plant and machinery. So, noble Lords should have complete confidence that there will be an opportunity for them to consider, debate and scrutinise these measures and the Government’s overall business rates policy.

I should have declared my residential and commercial property interests as set out in the register; I forgot to do that right at the beginning. I must underline that I have not been involved with any material change of circumstance approach, but I recognise that many businesses, including many small businesses, are waiting eagerly to hear how we will resolve this situation.

[Baroness Pinnock (LD)]

My Lords, I thank the Minister for his response. We clearly had evidence of the volume of appeals by businesses. I am still concerned about the value of those and whether sufficient money is being made available to recompense businesses, but we will come to that in the next debate. Having said that, I thank the Minister for his reply and beg leave to withdraw the amendment.

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[Lord Cormack (Con)]

My Lords, I intervene very briefly, as I did at the substitute Second Reading and in Committee. I am concerned only with Clause 1 of the Bill, and I declare again—as I have in the past—that I have from time to time over the last nearly 50 years given advice to the Machinery Users’ Association, which was established in 1884 to give advice on the rating of plant and industrial machinery. Many of its members are, of course, concerned, particularly with the questions the noble Baroness, Lady Pinnock, just raised.

I do not want to prolong the debate; it is clear that the Bill is going to go through your Lordships’ House without amendment. I just ask my noble friend to give as much information and as clear answers as he can to the wholly legitimate questions asked by the noble Baronesses, Lady Blake of Leeds and Lady Pinnock. I await his replies with considerable interest.

[Lord Greenhalgh (Con)]

My Lords, I will do my very best. I start by saying that local authorities are protected by what is known as the local tax income guarantee; I know the noble Baroness, Lady Pinnock, knows about that. Three critical questions have been raised, and I will take time in answering them to reassure noble Lords that this has been well thought through.

First, there is a false equivalence between the £1.5 billion and the material change in circumstances. We do not see the £1.5 billion as a like-for-like compensation for Covid-related MCC claims. The statistics show that it would have seen reductions applied indiscriminately to properties whether or not their occupiers needed support. The £1.5 billion relief we are introducing is not—and should not be—designed to mimic or replace the MCCs that were submitted. It is better than that: it is focused on those who submitted MCCs who genuinely needed support and may have had to wait years. They will be able to access it more quickly because the approach is more targeted, and industries that have received quite considerable support are excluded from that amount. That is why we are taking this important approach.

I think the critical question that the noble Baronesses, Lady Blake and Lady Pinnock, asked is how the £1.5 billion will be distributed. I have to say that I have taken quite a long time to understand that myself; I put that right on the table. I have had some help from the former chief economist of the Bank of England, Andy Haldane, and I have had meetings with colleagues and Ministers in the Treasury about this. I think I broadly understand it. The marker that will be used at the national level is the ONS data around the gross value added reduction for those industries that have not had support. That is very robust information at the national level, but unfortunately we do not have very good data at the regional level for the last two years. So we will use the data we have at the local level around industries, because we know, broadly speaking, which businesses are at the local council level. Therefore, it is not something that is going to be gained. There is a clear proxy metric in GVA with the good data we have at the local level. I am satisfied that this is the best we can do in these circumstances and a sensible way in which to divide the cake.

The last question is around the timing of the guidance and implementation. I have spoken of the benefits of using locally administered business rates relief, rather than the appeals system, to funnel support where it is needed. One of these is pace, and since Parliament is agreed on the principle of the Government’s approach, we have a responsibility to avoid unnecessary delay. We need to move, and that is one of the real benefits of this course of action. The best course of action is to speed the Bill through to Royal Assent. On that basis, I hope noble Lords will not press their amendments.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the Minister for taking our concerns very seriously and for going away and having conversations with some very senior people. I am sure I speak for the noble Lords on the Liberal Democrat Benches when I say that we appreciate that. In Committee this concern was repeated from whichever Bench someone was speaking from. This is a very real concern, so I sincerely thank the Minister.

The question that will remain, of course, is how this is maintained and monitored and how we make sure that there will be recourse to additional funds if the £1.5 billion is not adequate. I am not sure that I have quite got that security of knowledge.

[Lord Greenhalgh (Con)]

The Government always keep these matters under review. We recognise the importance of business rates in providing the financial stability and underpinning for local councils, and I can make that commitment, as with all government policy.

[Baroness Blake of Leeds (Lab)]

With those reassurances, I beg leave to withdraw my amendment.

Conformity Assessment (Mutual Recognition Agreements) (Construction Products) (Amendment) Regulations 2021

Lord Greenhalgh Excerpts

Wednesday 24th November 2021 Lords Chamber

Moved by

[Lord Greenhalgh]

That the draft Regulations laid before the House on 16 September and 21 October be approved.

Considered in Grand Committee on 23 November

Motions agreed.

Smoke-free Pavements

Lord Greenhalgh Excerpts

Wednesday 24th November 2021 Lords Chamber

[Baroness Merron]

To ask Her Majesty’s Government what plans they have to introduce rules on smoke-free pavements outside pubs and restaurants.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

The temporary pavement licence provisions introduced in the Business and Planning Act 2020 and subsequently extended have a national smoke-free condition requiring businesses to provide seating where smoking is not permitted. In addition, local authorities can attach their own conditions, including those that prohibit smoking. The Government have committed in principle to making the pavement licensing permanent and will provide further details in due course.

[Baroness Merron (Lab)]

My Lords, the pandemic has of course seen a major expansion in the use of pavement space, alongside which the Government have committed to deliver a smoke-free nation by 2030 to improve our health. How is the Minister working with his Health colleagues to bring this all together for smoke-free pavement licences to play their part in the forthcoming tobacco control plan? Will the Government take the opportunity to adopt the tobacco amendments to the Health and Care Bill when they come before this House from the other place?

[Lord Greenhalgh (Con)]

My Lords, this Government can walk and chew gum at the same time. We are working closely with my noble friend the Minister and colleagues at the Department of Health. I should probably declare a personal interest as the son of a vascular surgeon who served on the Chief Medical Officer’s Scientific Committee on Tobacco and Health in the period when the noble Baroness was an esteemed Minister in the Administration in the first decade of this century. Of course we have not committed to how we will move forward with regard to the future of this legislation, but it is important to achieve the target of reducing smoking while reviving our economy.

[Lord Smith of Hindhead (Con)]

My Lords, I refer to my interests as set out in the register. The pre-pandemic hospitality industry was the third largest private sector employer and created almost 5% of GDP. At present the industry is achieving just 55% of its pre-pandemic sales but is working hard to fully recover. Does the Minister agree that now is not the right time to be discussing more red tape and restrictions for an industry that helps to drive economic growth, social cohesion and job creation?

[Lord Greenhalgh (Con)]

I agree entirely with my noble friend: we need to see the revival of that industry. We believe that that can be done by taking a proportionate approach of keeping those people who do not wish to smoke in outside pavement space segregated from those who do. In that way we can provide an environment that enables people to exercise their personal choice and enables those areas where smoking rates are higher, which are typically in the north of England, to get back on their feet, which is vital.

[Baroness Finlay of Llandaff (CB)]

My Lords, there is good evidence that exposure to smoking not only damages children’s health but makes them much more likely to go on to become smokers themselves, copying the role model of the adults they see. How does the Minister justify the Government’s current policy on pavement licences, which exposes children to a significant risk of addiction to a lethal product? Do the Government have any evidence that extending smoke-free areas would damage the hospitality industry at all?

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[Lord Greenhalgh (Con)]

My Lords, we need to recognise that we are making excellent progress. We as a Government are committed to reducing the harms caused by tobacco and have made long-term progress in reducing smoking rates, which are currently at 13.9%, the lowest on record, but we need to balance the endeavour to reduce smoking with the need to revive our economy.

[Lord Faulkner of Worcester (Lab)]

My Lords, does the Minister not see an inconsistency between his continued assertion that we are, to quote the words that he used when replying to my Motion of regret on this subject on 14 July,

“on the journey towards a smoke-free 2030”—[Official Report, 14/7/21; col. 1844.]

and the Government’s repeated reluctance to accept that 100% smoke-free pavement licences enjoy overwhelming public support, to say nothing of the overwhelming majority of noble Lords, who are also in favour? Will he at least undertake to find out the experience of the 10 local authorities that have chosen to go smoke free with their pavements to find out whether they have experienced any problems and indeed if their hospitality industry has suffered any ill effects?

[Lord Greenhalgh (Con)]

My Lords, I have to accept that we are on a journey. We need to learn from local areas, particularly those areas that have chosen locally to introduce a ban on smoking in the way that I think many local Lords are pushing for. We need to learn from that; you test what you want to expand and you expand what you have tested. We will look carefully at their experience.

[Baroness Northover (LD)]

My Lords, does the Minister recognise that these areas are an extension of inside that is outside and that surveys show that smoke-free areas, inside and outside, are popular, healthier and child friendly? I am glad that he says that he will now work, this time, closely with the Department of Health. Will he ensure that he identifies, sees through and rebuts material that comes from other lobbies?

[Lord Greenhalgh (Con)]

My Lords, any government Minister needs to be aware of when they are being lobbied. It is important to understand where the information is coming from and whether there is a prejudicial interest. It is also important that we in government work across departments to make the right decisions at the right time.

[Baroness Hayman of Ullock (Lab)]

According to Keep Britain Tidy, cigarette butts are the most littered item. They also have the highest levels of toxicity and are the least recovered, leaching into the ground and into our water systems. What are the Government doing to ensure that the tobacco industry pays towards the costs of cleaning them up and driving down such pollution?

[Lord Greenhalgh (Con)]

My Lords, I am not sure that that question is directed entirely at my department —my noble friend probably knows more about this than me—but I am happy to write to the noble Baroness specifically on what we are doing in that regard.

[Lord Young of Cookham (Con)]

My Lords, all previous legislation to reduce the harm done by smoking has been on a national basis, such as the ban on smoking on public transport and the ban on smoking in public places. However, despite representations from the Local Government Association that any ban under this measure should also be on a national basis, the Government declined and left it to local discretion. Will the Government follow up the suggestion by the noble Lord, Lord Faulkner, and, in the light of that, consider giving a clear health warning about the risks of damage from smoking and introduce a total ban on smoking on pavements?

[Lord Greenhalgh (Con)]

I thank my noble friend for making the point about how progress has been made and that it has been on a national basis. However, as someone who spent 20 years in local government— 16 as a councillor and four in City Hall as deputy mayor—I know that sometimes it is right to recognise that we do not have problems equally on a national basis. Smoking rates are higher in the north of England, so let us learn from there first before we take the next step.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I recall the intense pressure that was put on me in the 1980s when I introduced a Bill to ban smoking in public places. Will the Minister tell us what representations and meetings he and his colleagues in his and other departments have had with representatives of the tobacco industry? If he cannot tell me today, will he write?

[Lord Greenhalgh (Con)]

My Lords, I will have to write on that engagement because I will not be able to give a sufficiently accurate answer now. I am happy to do that.

[Baroness Eaton (Con)]

My Lords, it could be said that the Government control too much of our lives. Does the Minister agree that it is right to let local authorities set their own local conditions with regard to smoking on pavements, rather than Whitehall issuing a mandate for pavements to be smoke free? Could he give some examples of where it is working and decisions have been made locally?

[Lord Greenhalgh (Con)]

My noble friend has not had the opportunity to serve as a Minister—although it may happen in future when potentially I move on—but she has been a very distinguished leader of a local authority and chairman of the Local Government Association, so for her to make that statement means that it is clear that we need to learn the lessons from local government and ensure that we act in a way that builds on those lessons. It is right that some decisions are taken locally; I entirely support that view.

[Lord Berkeley (Lab)]

My Lords, would I be right in thinking that the Minister’s view is that if people want to smoke and kill not only themselves but other people, that is all right? Could he tell us how many people have been convicted for smoking in non-smoking areas on the pavements?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I have to say that that is putting words in my mouth. We want to discourage smoking. As I said, we as a Government are trying to move towards a smoke-free 2030. We are trying to ensure that the smallest possible number of children take up e-cigarettes—we are seeing great progress on that. We are taking a number of measures to eradicate this and hit that target. At the same time, we believe in personal choice. That is something that this Government strongly believe in and it is also a route to seeing a stronger bounce-back and a stronger economy as a result.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, is there anywhere in the public square where smokers will be left in peace and permitted to indulge in a legal, if anti-social, habit that they as adults freely choose to indulge in and even enjoy? Does the Minister consider that the rather grungy lean-to behind the bike sheds that noble Lords who smoke have been banished to is suitably far away from any restaurants or bars to be safe from overzealous public health regulators in here, or might we be driven into the Thames? I am asking for a friend or two.

[Lord Greenhalgh (Con)]

My Lords, I have to say that because alcohol is served in that grungy location, it attracts even me and I am a non-smoker. I believe in personal choice and I recognise what is legal and illegal today.

Local Audit (Appointing Person) (Amendment) Regulations 2021

Lord Greenhalgh Excerpts

Tuesday 23rd November 2021 Grand Committee

Moved by

[Lord Greenhalgh]

That the Grand Committee do consider the Local Audit (Appointing Person) (Amendment) Regulations 2021.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, the regulations we are considering today were laid in draft before the House on 21 October 2021. If approved and made, they will provide for the appointing person to set fee scales for local audit later in the financial year, apply standardised fee variations in specific circumstances and appoint auditors for shorter contract periods where appropriate.

These regulations are designed to provide the appointing person with greater flexibility to ensure that the costs to audit firms of additional work are met, and to reduce the need for time-consuming case-by-case consideration of fee variation requests, in order to support the timely completion of local audits.

The Local Audit and Accountability Act 2014 enables the Secretary of State, through secondary legislation, to make regulations. This statutory instrument was laid before Parliament under the affirmative resolution procedure. The 2014 Act placed responsibility on local bodies to appoint their own auditors. However, the Act also provided for an “appointing person”, specified by the Secretary of State, to appoint auditors on behalf of local bodies that choose to opt in to such arrangements. Public Sector Audit Appointments Ltd, a subsidiary of the Local Government Association, is the body currently appointed to perform this role.

In September 2020, Sir Tony Redmond published his independent review into the effectiveness of external audit and transparency of financial reporting in local authorities. The Redmond review found that there was an increasing disparity between the fee scales set by Public Sector Audit Appointments Ltd and the amount of work being carried out by auditors. This had led in turn to a large increase in the amount of fee variation requests. These are requests from auditors to charge additional fees beyond those provided for in the fee scales set by Public Sector Audit Appointments Ltd for each audit year.

The Local Audit (Appointing Person) Regulations 2015 provide for fee variations relating to the audit of a particular authority to be considered by Public Sector Audit Appointments. In practice, this means that Public Sector Audit Appointments Ltd can consider and approve fee variations on a case-by-case basis only.

In its response to the Redmond review, the Government committed to review regulations to provide Public Sector Audit Appointments Ltd with greater flexibility to ensure that the costs to audit firms of additional work were met more easily. To provide this flexibility, earlier this year the Government consulted on potential amendments to the 2015 regulations. The overwhelming majority of respondents to the consultation agreed with the Government’s proposals, which we now propose as the following amendments to the 2015 regulations.

First, this statutory instrument will amend the regulatory deadline for Public Sector Audit Appointments to set fee scales from before the start of the financial year to 30 November of the financial year to which the fee scales relate. This will enable Public Sector Audit Appointments Ltd to take into account more up-to-date information when setting fee scales, including results from previous audits. More accurate fee scales should help to reduce the number of instances where fee variations are required.

Secondly, this instrument will enable Public Sector Audit Appointments Ltd to set standardised fee variations to be applied to all local bodies or groups of local bodies. This change is designed to streamline the fee variation process where a particular issue has had a similar impact on the audit of large numbers of local bodies. Circumstances in which these may apply could include a regulatory or policy change, such as a change to accounting or auditing codes, or even one-off events that have a national or far-reaching impact, as we have experienced with the pandemic. In these circumstances, Public Sector Audit Appointments Ltd will be able to apply a standardised fee to all affected bodies, preventing the auditor from having to submit a fee variation request for each individual body. Public Sector Audit Appointments will be required to consult both opted-in local bodies and local auditors before setting standardised fee variations.

Thirdly, this instrument will give Public Sector Audit Appointments the flexibility to appoint auditors for one or more financial years at time, up to a maximum of five consecutive years. This could include years which precede the date on which the local authority opts in, if those years still have an audit outstanding. Under existing regulations, Public Sector Audit Appointments is required to appoint an auditor to that authority for the remainder of the compulsory appointing period, which could be up to five years, depending at what point in the appointing period the authority elects to opt in.

In conclusion, these changes will help to support the stability of the local audit market by making it easier for firms to claim for the costs of work completed—

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[Lord Greenhalgh (Con)]

My Lords, in conclusion, these changes will help to support the stability of the local audit market by making it easier for firms to claim for the costs of work completed. Alongside this, we are continuing to implement all the recommendations that we committed to in our response to the Redmond review.

I hope that colleagues will join me in supporting the draft regulations. I commend them to the Grand Committee.

[Lord Jones (Lab)]

My Lords, I thank the Minister for his introduction and the details he has to hand. Can he give instances of the likely typical fees that will be set by the appointing person? Fees are public money. How will the appointing person be selected or chosen? Will it be a ministerial appointment, or will it be left to local government itself via its own representative bodies? What will be the likely salary of the appointing person, or is that settled already? I ask questions the answers to which may not be to the Minister’s conscientious hand. If that is the case, might he please write?

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[Lord Greenhalgh (Con)]

My Lords, we have had an interesting short debate on these regulations, and I thank all noble Lords for their contributions. The problem around audit is long-standing. I remember when I first became a councillor, which was a little later than the noble Lord, Lord Kennedy, back in January 1996 —a very cold month, if I remember—there were real difficulties with filing accounts on time, even then. This has been a long-standing problem and is not a recent one. Those who have read the Redmond review will recognise that the best way to deal with it is by investing and providing additional funding to support local bodies to improve standards. The point made by the noble Baroness, Lady Pinnock, is important. There is a contribution of some £15 million to support local bodies with rising audit fees, making sure that there is the competence required to file accounts in a timely way.

Often, there will be an issue around reconciliation of accounts, which is quite shocking. If you cannot reconcile your accounts—the fundamental accounts in control—money can be lost. There have been examples of councils losing money. So, having high-quality audit is extremely important, as is the completion of audits, which is vital in maintaining transparency and assurance of local authority accounts. Late delivery of local assurance can have a significant impact, not just on local authority financial planning but on the timely completion of whole government accounts. That is why the Government are continuing to implement all recommendations of the Redmond review, including the regulations before us today.

I will do my best to answer some of the questions and I will follow up in writing if I am not able to. In answer to the noble Lord, Lord Jones, the appointing person is specified by the Secretary of State at the Department for Levelling Up, Housing and Communities. It is not a salaried position; they are paid by the local authorities. Importantly, we are keen on the use of the scheme through the Local Government Association and Public Sector Audit Appointments Ltd, which has the specific technical expertise. Of course, local authorities can choose who they like. We recognise that this is a good scheme, which happens to be over a five-year period.

In response to the noble Baroness, Lady Pinnock, I will write on her specific points about shorter appointments, but all appointments require local authorities to voluntarily opt in. We recently consulted on proposals to establish the audit, reporting and governance authority, which is due to replace the Financial Reporting Council as the new systems leader for local audit. We will publish our consultation response in due course.

This is a largely technical provision, which I think has the support of noble Lords.

[Baroness Pinnock (LD)]

Before the noble Lord sits down, I asked whether the standardised variations of the fees would be in proportion to the accounts that were being audited.

[Lord Greenhalgh (Con)]

I thank the noble Baroness for that specific point. It is obviously technical in its nature. Public Sector Audit Appointments Ltd will be required to consult local bodies and local auditors before setting standardised fees.

Motion agreed.

Conformity Assessment (Mutual Recognition Agreements) (Construction Products) (Amendment) Regulations 2021

Lord Greenhalgh Excerpts

Tuesday 23rd November 2021 Grand Committee

Moved by

[Lord Greenhalgh]

That the Grand Committee do consider the Conformity Assessment (Mutual Recognition Agreements) (Construction Products) (Amendment) Regulations 2021.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, these regulations were laid before both Houses on 16 September 2021. They are part of the Government’s programme to implement the UK-Canada Trade Continuity Agreement, specifically in the context of construction products.

These regulations are made using powers in the Trade Act 2021 to amend the Conformity Assessment (Mutual Recognition Agreements) and Weights and Measures (Intoxicating Liquor) (Amendment) Regulations 2021, known as the 2021 regulations. They make a simple amendment in order to cite the construction products regulations as specified regulations within that legislation.

This brings me to the detail of our statutory instrument. Using powers from the Trade Act 2021, these regulations make an amendment to the 2021 regulations to include the UK CPR as a specified regulation. They do no more than is necessary to implement the mutual recognition agreement on conformity assessment under the UK-Canada Trade Continuity Agreement. They do not change the key CPR requirements for placing construction products on the market in Great Britain. For those reasons, they are very simple to understand.

The effect of making this amendment can be considered in two parts. First, these regulations ensure that, pursuant to the UK-Canada Trade Continuity Agreement, the UK recognises and accepts a conformity assessment procedure or result issued by a Canadian conformity assessment body that has carried out the assessment of a construction product against UK CPR requirements. The effect of this is that a conformity assessment procedure undertaken by a Canadian conformity assessment body against UK designated standards will be treated as if it were performed by a UK approved body, enabling Canadian-assessed UK conformity assessment marked products to be placed on the market in Great Britain.

Secondly, and finally, these regulations enable the Secretary of State to assign an identification number to, and include in any register, a Canadian conformity assessment body carrying out an assessment in relation to the UK CPR and include a Canadian accreditation body in a register of those bodies. As a result, manufacturers can easily find and use a Canadian-based conformity assessment body that is accredited to undertake conformity assessment procedures against UK designated standards prior to export to Great Britain.

In summary, our overall approach to these amendments is entirely consistent with both the policy and legal intent of the Trade Act 2021 and enacts the policy that the Government have an obligation to execute as part of their international agreements. Equally, these regulations, and the 2021 regulations they amend, are entirely concurrent with the Northern Ireland protocol, which applies in Northern Ireland. These regulations serve a very specific purpose: to amend the 2021 regulations to ensure that the UK CPR is a specified regulation. This is necessary to enact the provisions of the UK-Canada Trade Agreement protocol on conformity assessment that came into force on 1 April 2021.

This instrument is necessary to ensure that we remove a technical barrier to trade between the UK and Canada and meet our obligations within the UK-Canada Trade Continuity Agreement, which has already come into force. I hope that colleagues will join me in supporting the draft regulations. I commend them to the Committee.

[Lord Jones (Lab)]

My Lords, I thank the Minister for his introduction to these regulations. Time is of the essence and I propose to be brief. In paragraph 4 of the helpful Explanatory Memorandum, reference is made to the territorial applications. So far as Wales is concerned, I refer to paragraph 10 on consultation and ask by what means were the consultations carried out? Were they carried out by officials—probably—or by Ministers? Was business done simply by letter? How did the department and the Senedd relate on this technical matter, which one supports? On this issue, how does a great department of state deal with a Parliament in faraway Wales? The Minister may have an observation to make.

Paragraph 12 deals with impact. Can the Minister furnish an example of how these regulations affect a specific business? Perhaps he can give one example, large or small. Paragraph 13 deals with small businesses, which are the lifeblood of the Welsh economy. Clearly, Government UK are the agency involved in communications with small businesses. Was the Federation of Small Businesses involved? Were chambers of trade and the CBI involved? What were the channels of communication used by Government UK where Wales is concerned? Is there an existing estimate of the envisaged effects? Also, is there a word missing from the first line of paragraph 13?

If the answers are not available now, might the Minister write? He might know that with regard to the European Union, Wales very heavily decided that it wanted to come out.

--- Later in debate ---

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

My Lords, it is good to be back in the Moses Room with the Minister. As other Members have said, the regulations before us are technical. I can say at the outset that I am happy to support them.

My noble friend Lord Jones asked about consultation. I am sure that the Minister, the noble Lord, Lord Greenhalgh, will come back on that point, particularly in regard to consultation with the devolved Administrations. My noble friend mentioned the Senedd, but it would be interesting to hear what consultations have taken place with the other Administrations. I also noted from the Dispatch Box that there was no consultation with the public because it was not deemed necessary.

The noble Baroness, Lady Pinnock, raised an important issue in respect of Regulation 6. It is absolutely fine to agree the regulations as they are here now; there is no problem with them whatever. But the question is always, is it not, what happens when things go wrong. I think that was the noble Baroness’s point. It is a fair point. We are authorising a body in another country to certify that products are correct and stuff, but further down the track, if things go wrong, what processes are there? How do we deal with that? This is the nub of the question that the noble Baroness and I want answered.

I will leave it there. I accept that, if the Minister does not have an answer now, he will write to colleagues and place a copy in the Library. As I said, I am content with the regulations as they stand.

[Lord Greenhalgh (Con)]

My Lords, I particularly appreciated the contribution from the noble Lord, Lord Jones, who I gather has had more than half a century of parliamentary service. That is quite incredible; I am almost the same age as the number of years he has served in both Houses. The noble Lord is obviously very passionate about Wales. He wanted to know about the consultation. No public consultation was carried out, because it was not considered necessary.

I understand a bit about the principles of this. It is all about opening up markets. We know that there is a shortage of construction products; that was the nature of the question from the noble Baroness, Lady Pinnock, and the noble Lord, Lord Kennedy. Although it is good in principle, how do we ensure in practice that the construction products that are recognised by a conformity assessment body that is not our own do not result in any dumbing down in standards? Obviously, as the Minister for Building Safety, that has been the key question on which I have wanted reassurance. We are absolutely committed to maintaining high standards for construction products. We know what we saw in the tragedy of Grenfell; indeed, I referenced Lakanal House in Southwark and Garnock Court in 1999. Every decade, we have had a tragedy.

I assure noble Lords that this legislation does not amend the standard of construction products being placed on the market. That is the critical thing for everybody to recognise. However, there is a shortage of construction materials, so we will get high-quality products, increase availability and encourage the flow between the UK and Canada. That can only be a good thing, but I take the point. I hope that I have given sufficient reassurance and answered the specific point on consultation.

If there is anything else, I will be happy to pick it up and write to noble Lords, for example on some of the technical points.

[Lord Jones (Lab)]

Thank you for writing.

[Lord Greenhalgh (Con)]

Thank you. To conclude, we think that these regulations are vital, as is getting these construction products assessed against UK CPR requirements. If those assessments are to be carried out by Canadian conformity assessment bodies, we need to ensure that they are assessed against our own regulatory requirements.

I have done my best to answer the questions I can answer. I will write to the noble Lord, Lord Jones. I take it that noble Lords support the regulations, and I thank them for that.

Motion agreed.

Leaseholders: Costs

Lord Greenhalgh Excerpts

Thursday 18th November 2021 Lords Chamber

[Baroness Wilcox of Newport (Lab)]

My Lords, on behalf of my noble friend Lord Kennedy of Southwark and with his permission, I beg leave to ask the Question standing in his name on the Order Paper.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

The Government are investing £5.1 billion to remediate unsafe cladding and residential buildings over 18 metres. The Building Safety Bill will require building owners to consider other cost recovery routes for remediation before passing them on to leaseholders. A new developer tax and levy will ensure that industry contributes towards making buildings safer. For the small number of 11 to 18-metre buildings with remediation costs for unsafe cladding, we are exploring all options to make sure that leaseholders are protected.

[Baroness Wilcox of Newport (Lab)]

My Lords, does the noble Lord agree with his Secretary of State, the right honourable Michael Gove MP, when he expresses concern at leaseholders having to pay for all the faults and mistakes of others? If he shares that concern, surely the right thing, after all this time, is to make those responsible for this scandal—this crisis—pay up, not the innocent victims.

[Lord Greenhalgh (Con)]

My Lords, unsurprisingly, I completely agree with the Secretary of State on those principles, and I add a third: first, we need to protect leaseholders as far as we can; secondly, we must ensure that the polluter pays, and that goes beyond the developers to every single person who has contributed to this crisis; and thirdly, we need a degree of proportionality, so we do not create an industry that profiteers off the back of the poor leaseholders affected.

[The Lord Speaker (Lord McFall of Alcluith)]

Lord Haselhurst? Is he not present? Then I call the noble Viscount, Lord Stansgate.

--- Later in debate ---

[Lord Young of Cookham (Con)]

My Lords, I am grateful to my noble friend for what I know he was doing behind the scenes to sort this. Can he confirm that when his Secretary of State was given his new job, he was instructed by the Prime Minister to resolve the cladding crisis? This clearly involves measures beyond those that my noble friend has already referred to. If innocent leaseholders are to avoid financial distress, bankruptcy and eviction, either the Treasury or those responsible for building these defective flats will have to dig deeper into their pockets. Does he agree?

[Lord Greenhalgh (Con)]

My noble friend makes it easy for me: yes, I agree. Implicit in the fact that the Treasury would have supported a subsidised financing scheme is that we need more taxpayer subsidy, but it cannot be the only answer. We need to make sure the polluter pays, and the Secretary of State is looking at every avenue to do that.

--- Later in debate ---

[Baroness Pinnock (LD)]

My Lords, I remind the House of my relevant interests as in the register. If the Government are to avoid a torrent of bankruptcies by April next year, as has been predicted by Inside Housing, action must be swift. In particular, I ask the Minister about shared ownership. Somebody with shared equity of 25% is being asked to pay 100% of the remediation costs. That might be right in law, but it cannot be right in fact. What on earth are the Government going to do to safeguard shared owners?

[Lord Greenhalgh (Con)]

My Lords, I feel the burden, particularly on shared owners, who have a fraction of the equity in their home but face intolerable bills. I am surprised when I hear that social landlords, who should be caring for the people who live in those homes—the nurses and other people who support our NHS—are considering massive remediation schemes, very often for buildings that really require only mitigation at far lower cost instead. An MP raised a case with me yesterday of a nine-metre building where shared owners are facing bills of £20,000. That is because there is no sense of proportion. Let us get a sense of proportion, protect leaseholders and shared owners, and make sure that the polluter pays.

[The Lord Speaker (Lord McFall of Alcluith)]

My apologies to Members. My list was the list for the fourth Question, not the third Question. I think we are on the right track again if I call the noble Baroness, Lady Chakrabarti.

[Baroness Chakrabarti (Lab)]

My Lords, faced with repeated variations on this question from my tenacious noble friend Lord Kennedy of Southwark, I have heard the always affable Minister talk about this injustice in terms of complexity, sometimes referring leaseholders to their contracts. I am delighted that the new Secretary of State takes a more bullish approach, suggesting that leaseholders should pay nothing and acknowledging that we collectively—the department, some in local government and others in the private sector—failed people at Grenfell. That is a wonderful acknowledgement of principle. Why did it take four and a half years, and when will we move from principle to practice?

[Lord Greenhalgh (Con)]

We will move from principle into practice in a matter of months, but this problem has occurred over decades. Sadly, every decade, there has been a significant fire in a high-rise where there was a loss of life: Garnock Court in 1999, Lakanal House in Southwark in 2009 and the tragedy of Grenfell in 2017. Governments knew that cladding was often the cause, as it was in Garnock Court, and the regulations were actually dampened down under a previous Labour Government, who inserted the word “adequately”. It is a mess that took decades; give us months to sort it out.

[Baroness Thornhill (LD)]

Notwithstanding the Minister’s earlier comments, housing associations and councils too face a challenging situation. Both the LGA and the National Housing Federation have evidenced the double whammy of the financial burden to remedy the fire safety issues for the tenants and, consequently, less money to invest in their existing stock—in particular, to build new social and affordable homes. In the recent rethinking, please will the Minister agree to look specifically at the situation faced by housing associations and councils and consider widening the criteria for support for any money that is available? This is their tenants’ rent money, after all, and they too should not have to pay for 20 years of industry failure.

[Lord Greenhalgh (Con)]

Of course we want to protect leaseholders and ensure that social landlords can build new homes of high quality but, far too often, they as developers were in charge of building homes of poor quality, and they need to fix those homes. The figures are that, as of 31 October, £97.3 million has been approved from the building safety fund, and there is the £200 million to remove cladding of aluminium composite material. We are doing what we can to protect leaseholders, but we recognise the challenges faced by registered providers.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, further to that very point, the Secretary of State, in front of the HCLG Committee, acknowledged the unfair and undue burden on both leaseholders and social housing tenants to shoulder the remediation costs. How do the Government plan to alleviate what the Secretary of State referred to as the Sophie’s choice of the housing associations between safety and investing in stock and quality?

[Lord Greenhalgh (Con)]

All major landlords, including social landlords, will have to do that as a matter of course. We are providing funds that will protect leaseholders where the balance sheet does not enable them to do so, and I have given those figures already. However, we ask for a sense of proportion from registered providers—I have reached out to the noble Baroness’s chief executive—not to inflate the bill just because the taxpayer sums are there, but to keep costs down. We need to ensure that together we remediate, mitigate where that is preferable to remediation, keep tenants safe and use the affordable homes programme to build more homes.

[Baroness Jones of Moulsecoomb (GP)]

It is not just the remedial work, it is also the fact that insurance premiums have gone up, leaseholders cannot sell their property and they sometimes have to have a waking watch, which is a 24/7 dedicated project to protect from future fires. The Minister said that the polluter pays, but that is not how I see it. The Government are using taxpayer money to finance this. Why are the Government not insisting that builders pay? Is it more corruption: these builders and developers are government friends, so they should not have to pay?

[Lord Greenhalgh (Con)]

I think that is an unfortunate line. Developers have caused this, and there are the insulation manufacturers and product manufacturers in the frame—for instance, for fire doors that do not act as fire doors. We have announced both a tax and a levy, and the new Secretary of State has further plans to ensure that the polluter will pay.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, for the avoidance of doubt, what assessment has been made that the building safety levy will provide the most balanced approach for funding historical remediation of building safety defects? Have the Government carried out an impact assessment?

[Lord Greenhalgh (Con)]

The building safety levy is one in a suite of measures. The Gateway 2 levy which the noble Baroness refers to runs alongside the residential property developer tax. There is a levy and a tax. That will make a contribution but, by and large, we are seeking to fund the running cost of a high-risk regime, so her question is not actually hitting the mark.

Islamophobia

Lord Greenhalgh Excerpts

Monday 15th November 2021 Lords Chamber

[Lord Sheikh]

To ask Her Majesty’s Government what is their position on adopting a formal definition of Islamophobia.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

The Government remain committed to acting against Islamophobia in all its forms. We utterly condemn the prejudice, discrimination and hatred directed towards British Muslims due to their faith. While we are considering definitions of Islamophobia, this in no way restrains our ability to monitor, prosecute and punish those perpetrating religiously motivated hate crime. We have provided Tell MAMA with £4 million over the last five years to monitor anti-Muslim hate crime and to support victims.

[Lord Sheikh (Con)]

My Lords, I thank my noble friend for his response. I first raised this matter in your Lordships’ House on 11 July 2019. We were told then that the Government agree that there needs to be a definition and that two advisers would be appointed. One adviser was appointed more than two years ago and nothing tangible has been done since. The Muslim community is concerned about issues relating to Islamophobia, and would ask that a second adviser now be appointed and their terms of reference agreed, which must include consultation with the community. We need to do this without any further delay and to commence the process.

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend for raising the concerns of the Muslim community, for his contribution to how we tackle the issue of Islamophobia and for his advice on how best to proceed. We remain committed to tackling Islamophobia where it exists across our communities, and we will continue to consider this issue with the utmost seriousness.

[Baroness Blake of Leeds (Lab)]

My Lords, the Government’s own hate crime statistics show that nearly half of all recorded religious hate crimes were against Muslims. What specific urgent steps have the Government taken to end this abuse and will the Minister commit to working with Muslim groups to ensure urgent progress?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, it is quite correct to say “nearly half”—around 45% of religiously motivated hate crime was against Muslims. As I mentioned in my Answer, we provided Tell MAMA £4 million over the last five years to monitor anti-Muslim hate crimes and support victims. We have also awarded £1.8 million through the faith, race and hate crime grant scheme to support established community groups and civil society organisations to boost shared values and tackle religiously and racially motivated hate crime.

[Baroness Hussein-Ece (LD)]

My Lords, the Minister has acknowledged that the Home Office’s own figures show that 45% of all recent recorded religious hate crimes in England and Wales targeted British Muslims, but he has not yet said why the Government are so reluctant and are dragging their feet over coming up with a clear definition of Islamophobia. Why have they refused to do this? Is he aware that it is mainly Muslim women who are being targeted, because of the way they dress? Young people are being targeted and bullied in schools and on the streets. Given the scale of this problem, and given the rise in far-right extremism, can the Minister tell me what actual action, besides funding an organisation to monitor it, the Government will take to reassure the 3 million British Muslims of their commitment to tackling hatred, and the violent crimes and discrimination they are experiencing?

[Lord Greenhalgh (Con)]

My Lords, we recognise the seriousness of this, but we also recognise the point made by Khalid Mahmood MP in the other place that there are issues with the term “Islamophobia”. It has been weaponised by particular groups to tackle free speech. We recognise that it is important to establish a definition, but as he himself says, this is a difficult thing to solve and the first principle is to do no harm. We will proceed slowly and carefully in order to get this right.

[Lord Robathan (Con)]

My Lords, I think the House will be united against anybody who discriminates against somebody on their beliefs, but I will follow up on the last question about what exactly we mean by “Islamophobia”. I understand that it means fear of Islam. Why should one be frightened of one of the great religions of the world? It is fair enough to be frightened of the people who blew up the Manchester Arena or whatever, but surely not of Islam itself. I think the Minister is on my side in this: could we please be absolutely clear what it is that we are trying to do?

[Lord Greenhalgh (Con)]

My Lords, part of the difficulty of adopting some of the definitions that are being proposed, including that proposed by the APPG, is that they effectively conflate anti-Muslim hatred and Islamophobia with race. They also do not deal with issues around sectarianism. I completely agree that we want to tackle prejudice that discriminates against people based on who they are.

[Lord Singh of Wimbledon (CB)]

My Lords, a phobia is a fear. An irrational fear of Muslims is best countered by leaders of the community explaining that discrimination against women and violent attitudes to other faiths have nothing to do with Islam. Will the Minister agree with a previous government statement that all faiths and beliefs should be given equal protection, and that giving special consideration to one or two groups at the expense of others is totally contrary to the Government’s levelling-up agenda?

[Lord Greenhalgh (Con)]

My Lords, I can give that assurance. We must provide our faiths and beliefs, particularly a religion such as Islam, with the same protections as all other important religions, but we must not make the mistake of conflating religion with race, as I said in the previous answer.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, it is crucial that we distinguish between aberrant anti-Muslim bigotry and the highly contentious concept of Islamophobia which threatens free speech for fear of it being labelled Islamophobic. Does the Minister acknowledge this chilling effect for liberal Muslims, as is well described in the Don’t Divide Us film “‘Islamophobia!’ The Accusation that Silences Dissent”, muting any criticism of Islam as a religion and even muting critiques of political Islamism, however dangerous? Does the Minister accept the nervousness of politicians from all parties in supporting the Batley Grammar School teacher who was forced into hiding under shouts of “Islamophobic”, effectively allowing a default blasphemy law to be snuck in for fear of being called Islamophobic?

[Lord Greenhalgh (Con)]

My Lords, I do recognise that issue and I was trying to point that out in the responses I gave to previous supplementary questions. There is no doubt that the term “Islamophobia” is used as a heckler’s veto to shut down alternative opinions. We need to come up with a way forward that does not compromise free speech, and that is absolutely what we are committed to doing.

[Lord Mann (Non-Afl)]

Imam Qari Asim, whom the Government appointed to assist with this in 2019, has been a magnificent ally in the fight against anti-Semitism and had a huge impact in West Yorkshire on Covid vaccinations in the Muslim community. Would it not be in the Government’s interests to find more work for Qari Asim to do?

[Lord Greenhalgh (Con)]

My Lords, as someone who has spent time with and engaged with Qari Asim—I met him in my previous role as Faith Minister—I recognise that he has much to contribute and I am sure we will continue to make best use of his undoubted reputation and track record.

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

My Lords, Islamophobia is a real problem in the UK. Prejudice against Islam must be taken very seriously. The Government are certainly proceeding very slowly—there is no question about that—as highlighted by the noble Lord, Lord Sheikh. Can the Minister confirm that it is the Government’s intention to adopt a definition, or are they not planning to do so? It is very easy, either way.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I always thank the noble Lord for providing me with an easy question. Of course we want to work on establishing a definition that can be adopted, but I want the House to recognise that this is not a straightforward matter and will take time.

[Baroness Uddin (Non-Afl)]

My Lords, do the Government recognise that in any attempt to elucidate a formal definition of Islamophobia, religion and not race must be the central tenet? I agree with the noble Lord’s earlier response. Will the Minister give a personal assurance to the noble Lord, Lord Sheikh, me and others that he will do everything he can to resolve this as a matter of urgency?

[Lord Greenhalgh (Con)]

My Lords, I can give the assurance that we are tackling this as a matter of urgency. I completely agree with the point made about the need not to conflate race with religion. We need to get the definition of Islamophobia right.

Levelling Up White Paper

Lord Greenhalgh Excerpts

Monday 15th November 2021 Lords Chamber

[Lord Young of Cookham]

To ask Her Majesty’s Government when they will publish their white paper on levelling up.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

We aim to publish by the end of the year. However, our priority is to have a White Paper which meets the scale of ambition and sets out our transformative agenda to deliver real long-term change across the United Kingdom. Levelling up is at the heart of this Government’s agenda to build back better after the pandemic. The recent spending review showed the significant action we are already taking to empower local leaders, boost living standards, spread opportunity and restore local pride.

[Lord Young of Cookham (Con)]

My Lords, I welcome the Government’s commitment to levelling up and to reducing some of the inequalities in our country. But if levelling up is to be more than a slogan, does it not need clearly stated objectives, transparency in the allocation of resources, and measurements so that we can monitor progress? Is my noble friend able to tick those three boxes?

[Lord Greenhalgh (Con)]

My Lords, in July, the Prime Minister set out that we will have made progress in levelling up when we have begun to raise living standards, spread opportunity, improved our public services and restored people’s sense of pride in their community. The forthcoming White Paper will set out the further detail, so that I hope we will be able to tick my noble friend’s three boxes.

[Baroness Lister of Burtersett (Lab)]

My Lords, as the official Social Mobility Commission has made clear, levelling up is about people as well as places. Why therefore, to quote the commission, is England the only nation in the UK without a strategy to address child poverty?

[Lord Greenhalgh (Con)]

My Lords, levelling up covers all these issues. We have an approach to child poverty and take those issues very seriously indeed. More detail on these and other matters will of course be outlined in the forthcoming White Paper.

[Baroness Bull (CB)]

My Lords, further to the question of the noble Lord, Lord Young, on criteria, I note that the levelling-up fund, the towns fund and the community renewal fund all prioritise GVA over income deprivation as a metric to rank places according to need. This can lead areas with low economic output but affluent households to rank above places with high-value employment but low local incomes. Will the White Paper clarify whether the priority for levelling up is to help the poorest people wherever they live or to target the least productive localities? How do the Government want to be judged—on how individuals are faring, or on how far left-behind areas improve?

[Lord Greenhalgh (Con)]

My Lords, we need to understand that different funds have different priorities. The £4.8 billion levelling-up fund seeks to improve infrastructure and productivity, while the UK shared prosperity fund will deal with the issues around skills and replaces much of the funding that we saw through the EU structural funds. We need to see that in the round and, of course, the White Paper will provide further detail.

[Baroness Redfern (Con)]

My Lords, with the much-awaited publishing of the White Paper on levelling up, growing the private sector is what we all want to see in progress. As we see businesses planning at record levels of digital investment, does the Minister agree that priority must be given to reforming the skills system to better align with employers’ demands because of the acute skills shortage?

[Lord Greenhalgh (Con)]

I agree entirely with my noble friend. We do not want anyone to have to leave somewhere they love in order to have a truly fulfilling career. That is why we are investing £3.8 billion in skills by 2024-25 and have just set up our new adult numeracy programme, Multiply, to get hundreds of thousands more adults with functional numeracy skills across the United Kingdom.

[Baroness Thornhill (LD)]

Minister, successive Governments have grappled with this one under various names and the consensus is that they have largely failed. Do the Government recognise that the fragmented system of funding and bidding is part of this failure? Recently, the LGA found evidence that £23 billion of public funds aimed at regeneration were fragmented across 70 different funding streams and managed by 22 different departments or agencies. Are there any signs that the Government will change this scattergun approach?

[Lord Greenhalgh (Con)]

My Lords, just because previous Governments have failed does not mean that this Government will not succeed. However, I take on board the importance of ensuring that there is appropriate streamlining and that we do not have a scattergun approach to funding. The point is well made.

[Baroness Finlay of Llandaff (CB)]

I declare my role as chair of the Commission on Alcohol Harms. Have the Government included alcohol harm as the top priority in the levelling-up agenda, given that, regarding place, alcohol-related mortality is over 20% higher in the north-east of England than the English average? Alcohol-related violence is up to five and a half times more prevalent in lower socio-economic groups, and alcohol consumption is linked to poorer child development and poorer general well-being.

[Lord Greenhalgh (Con)]

My Lords, I expected this Question to go in any number of directions. It is important to address the barriers for people getting on in life. We are looking to spread opportunities and, of course, we need to address issues such as alcohol harm, which the noble Baroness has raised.

[Baroness Blake of Leeds (Lab)]

I declare my interest as a vice-president of the LGA. Will income disparity be addressed in the forthcoming White Paper, given that people in London are paid £16,150 more per year on average than people in Burnley? Do the Government plan to level up wages?

[Lord Greenhalgh (Con)]

My Lords, I am not sure that is the way to think about these problems. We need to recognise that, as well as the income disparity, there is the cost disparity. Admittedly, living in a great capital city comes at a price. We want to level up some of the areas that have been left behind. That does not mean we want a reduction in income in places such as London. We need to ensure that we lift all boats—that is the philosophy behind levelling up.

[Baroness Tyler of Enfield (LD)]

My Lords, does the Minister agree that financial inclusion—that is, ensuring that people have access to essential banking services and financial products that are fairly priced—is particularly important for areas that the Government are looking to level up, and that incorporating a clear financial inclusion strategy into the levelling-up agenda could make a big difference? Can the Minister say whether Treasury and DWP Ministers who lead on financial inclusion are part of the Government’s levelling-up agenda?

[Lord Greenhalgh (Con)]

My Lords, financial inclusion is very important in particular areas, and it is important in addressing it to bind together different departments. That is why there is a new levelling-up task force under the leadership of Andy Haldane that brings together the Department for Levelling Up, Housing and Communities and the Cabinet Office, precisely because we need that Whitehall join-up.

[Lord Adonis (Lab)]

My Lords, can the Minister tell the House how he believes that levelling up can be squared with cancelling the eastern leg of HS2? Is he aware that if HS2 East is cancelled, it will take four times longer to get to Sheffield and Leeds, and six times longer to get to Durham and Newcastle, than it takes to get to Birmingham? Does he appreciate that this will introduce a new east-west divide into the country, which will be the equivalent of our Victorian forebears deciding to build the railways in the western part of the country while leaving the eastern part of the country with the canals?

[Lord Greenhalgh (Con)]

My Lords, I recognise the noble Lord’s expertise on high-speed rail. However, I do not want to comment on the specific scheme. The most important thing for the Government is to back up the investment we have in transport infrastructure in our city regions, and we have committed £5.7 billion for transport settlements for those regions. Of course, decisions about high-speed rail will be taken in due course.

Council Tax: Second Homes

Lord Greenhalgh Excerpts

Thursday 4th November 2021 Lords Chamber

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

I recognise the noble Baroness’s interest in this issue. The Government have confirmed that we will legislate to require that holiday rentals meet an actual letting threshold before being assessed for business rates. This will ensure that only genuine holiday businesses can access the rate relief for small businesses. We will set out further details shortly in the Government’s consultation response.

[Baroness Thornhill (LD)]

Minister, this at last is a Cornish/Cumbrian Lib Dem campaign success—I can see the leaflets now. Can he explain why it has taken so long and say when we will get a timetable and conclusions of the 2018 consultation that was never actually published? Does he agree that salt has been rubbed into the wound, given that unscrupulous second-home owners have also received £104 million from Cornwall’s Covid aid pot, thus reducing the amount available to legitimate businesses?

[Lord Greenhalgh (Con)]

My Lords, I should have registered my residential and commercial property interests, although I have not tried to use this loophole. The Government announced in March that we will legislate, and we have been working very closely with the Treasury and the Valuation Office Agency to finalise the details of how and when this will be implemented. This of course takes time and we will publish our consultation response shortly.

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

My Lords, the proliferation of holiday lets in lakeland towns such as Ambleside, Windermere and Keswick is decimating the residential market for locals, particularly the young. The switch from council tax to a reduced business rate system will only aggravate the problem by further incentivising holiday letting. Is not the answer to this wider problem of drift to holiday letting to cap the number of holiday lets through the use of a combination of licensing and planning rules? Something has to be done.

[Lord Greenhalgh (Con)]

My Lords, the Government support the sharing economy, but the noble Lord will be pleased to know that we recognise the concerns about the uneven regulatory requirements in it. In the Tourism Recovery Plan, published in June 2021, we committed to consult on the introduction of a tourist accommodation registration scheme in England.

[Lord Shipley (LD)]

My Lords, the Minister referred to a consultation, but does he accept that every residential property should pay council tax and parish precepts, whether it is a main home, a second home or a holiday let, as a contribution to local services?

[Lord Greenhalgh (Con)]

I point out that 96% of second homes pay council tax in full, even though they may use local services only on an occasional basis. We believe that, in the sharing economy, where people run businesses and meet the threshold, it is reasonable for them not to pay council tax and to be subject to the business rates regime. No local authority has lost out, because they are covered by various grants in the business rates retention scheme.

[Baroness Blake of Leeds (Lab)]

My Lords, I refer to my interest as a vice-president of the LGA. Last year, the Chancellor announced a major reduction in stamp duty, which also covered buyers of buy-to-let properties, holiday homes and other second homes. Can the Minister confirm how much the tax cut for second home owners cost the public purse in total?

[Lord Greenhalgh (Con)]

My understanding is that we have introduced a stamp duty surcharge of some three percentage points on top of the standard rate for those who purchase additional properties. That covers all second home owners, so they are not getting off lightly when they are buying their homes, and the Treasury is doing very well out of that regime.

[Baroness Harris of Richmond (LD) [V]]

My Lords, I declare my interest as a second home owner. Can the Minister tell me what impact he thinks this will have on communities where second homes are prevalent?

[Lord Greenhalgh (Con)]

My Lords, it is a hard one to answer; in some areas where tourism is incredibly important it is a great boost to the economy, and in others it can result in the hollowing out of a particular area. I cannot give a simple response to that question.

[Lord Bassam of Brighton (Lab)]

My Lords, the Question of the noble Baroness, Lady Thornhill, touches on one aspect of the housing crisis facing many living in tourist areas, but particularly coastal communities. As we found during the 2018 Select Committee inquiry on seaside towns, many local residents face a combination of low pay, high rents or unaffordable mortgages, and being squeezed out of the housing market by holiday lets. What plans do the Government have to find a workable solution to the interplay of these connected problems that does not penalise families struggling to make ends meet and trying to find a decent job?

[Lord Greenhalgh (Con)]

My Lords, there are a number of schemes. I have mentioned the £11.5 billion affordable homes programme; there is also the first homes scheme, which has a minimum discount of 30% but which, with local councils, can be increased to 40% or 50%, so that new homes are offered first to people who live locally. Those kinds of initiatives will help local people get on the housing ladder, which is what the vast majority of people want.

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

My Lords, I refer the House to my entries in the register. Holiday lets, as we know, can be much more lucrative than tenancies, with landlords frequently able to bring in the income they would get over the course of a whole year from tenants in just the summer months. Small business rate relief also means that they can pay very little tax. Should the Government not do more in this area, perhaps with a larger levy, to encourage landlords to rent to tenants instead and help deal with the housing crisis that we spend so much time talking about in this House?

[Lord Greenhalgh (Con)]

My Lords, we are approaching this by ensuring that people do not game the system. It is perfectly proper, if you have a business, to be subject to the business rates regime. We have not yet finalised what that threshold will be. We are also consulting on whether there is a need for registration of these homes, as I have mentioned.