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

Debate between Lord Greenhalgh and Lord Bourne of Aberystwyth

2nd reading
Tuesday 19th October 2021 Grand Committee

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

My Lords, it is a pleasure to close what has been an engaging and informed debate. I thank noble Lords for their contributions both in the Room and in discussions outside—although I have to say that 10 officials were present for a drop-in session and no one turned up. I am very happy to have engagement on this, but it has sometimes been difficult. This is a short Bill, but the measures contained in it are important issues of public policy and I am grateful for all perspectives.

It is hugely important that the integrity and clarity of the valuation system that underpins business rates are maintained. That is why we are taking forward this important measure to clarify that coronavirus and its impacts should not be considered grounds for a material change of circumstance appeal. The alternative would be to allow the pandemic to have a hugely distorting effect on the rating system, casting local government financial planning into jeopardy. I say in response to the noble Baroness, Lady Pinnock, that these would have been considerable sums. Places such as Westminster obviously have a huge business rate base that is then allocated more widely. Clogging up the appeals courts for years to come is not the way forward and would have set a dangerous precedent for the future.

I am grateful for noble Lords’ support for the director disqualification measure in the Bill, which brings the conduct of former directors of dissolved companies into scope for investigation and potential disqualification proceedings. The United Kingdom has a world-class insolvency regime, and a strong enforcement framework is vital to that. Additionally, this measure will be an important tool for helping to combat bounce-back loan fraud and for deterring others from acting in breach of their duties as company directors.

Before I address the many points in this debate, which forms the largest part of my speech, I put on record that I have commercial property interests and am a company director—I should have raised that right at the start of my speech. Like the noble Earl, Lord Lytton, I did not claim from any of the schemes that we have been discussing today to mitigate against the payment of business rates.

In response to the noble Baroness, Lady Pinnock, I have to say that the purpose of the Bill is to restore the law to its intended practice and so no ratepayer will face seeing their bill increase as a result of the Bill. There will therefore be no material impact on the ratepayer.

The noble Earl, Lord Lytton, is a master of understanding procedure in the House, but I have been assured that this debate taking place in Grand Committee before Second Reading was agreed between the usual channels to prevent a very late sitting on Monday 18 October. In response to my noble friend Lord Holmes of Richmond, the Second Reading will take place tomorrow but without further formal debate.

The noble Baronesses, Lady Blake of Leeds and Lady Blower, raised the issue of how the £1.5 billion would be split and the approach to that. It will be allocated to local authorities based on the stock of properties in the area whose sectors have been affected by Covid-19 and which have not been eligible for existing support linked to business rates. Local authorities will then use their knowledge of local businesses and the local economy to make awards. The noble Baronesses, Lady Blower and Lady Pinnock, raised the issue of the additional administrative burdens. This will of course fall within the new burdens doctrine so that any administrative costs to local government will be covered.

Many noble Lords, including the noble Baronesses, Lady Blake and Lady Pinnock, the noble Earl, Lord Lytton, and my noble friends Lord Bourne and Lord Cormack, asked whether £1.5 billion is enough. This new £1.5 billion relief comes on top of an unprecedented £16 billion of relief over two years provided by the Government for the ratepayers most affected by the pandemic. This new scheme will be targeted at sectors that have been affected by Covid-19 but are not eligible for support linked to business rates. The new £1.5 billion of relief will enable local authorities to provide a meaningful level of support to those who have not been eligible for support linked to business rates.

My noble friend Lord Cormack and others raised the issue of the legislation’s retrospection. The Government are intervening because we want to ensure that the law regarding valuation operates correctly while providing significant relief to ensure that support is provided to businesses most in need. Allowing rateable values to fall for market and economy-wide matters such as the Covid-19 measures would be out of line with the principles of rating, where such matters are reflected at general revaluations. It is right that we ensure that the law continues to follow these principles.

My noble friend Lord Cormack and the noble Baronesses, Lady Blower and Lady Blake, all wanted to know when the guidance for local authorities on the operation of the relief scheme will be published. I recognise that it is important because it will help local authorities make decisions over the design of the relief scheme. We will publish the final local authority guidance as soon as the Bill receives Royal Assent. I want to let Members know that we are engaging very closely with the Local Government Association, the Institute of Revenues, Rating and Valuation and, obviously, CIPFA, in ensuring that we get this right.

My noble friend Lord Bourne and the noble Earl, Lord Lytton, all raised the issue of airports. It is a core principle of the business rates system that market-wide economic changes affecting property values, such as the pandemic, can and should only be considered at revaluation. The drop in demand for airports in light of the pandemic is therefore exactly the sort of economic change which should not be reflected between revaluations. The next revaluation in 2023 will be based on the market on 1 April 2021 and therefore will better reflect the impact of the pandemic.

My noble friend Lord Bourne noted that the measure is itself not enough for bounce-back loan recovery. The Government have been clear that bounce-back loan facilities are loans and not grants and have worked closely with lenders to develop industry-wide principles for the collection and recovery of bounce-back loans. This includes the recovery approach that lenders should take in the event that a borrower defaults and there is a claim on the guarantee with net proceeds being returned to Her Majesty’s Government.

[Lord Bourne of Aberystwyth (Con)]

That is not the specific point I was concerned about. With respect to the Minister, I quite appreciate that it is right to go after the bounce-back loans. My concern was that it did not extend to other creditors who are owed money and that there is a focus just on the bounce-back loans, whereas there is obviously a large field of creditors who have no redress if that is the only concern that the Government have.

[Lord Greenhalgh (Con)]

Beyond bounce-back loans, the Government are working closely with lenders to develop industry-wide principles so that we can learn from this and apply those in areas beyond bounce-back loans. However, I will write to my noble friend on that specific point.

The noble Baroness, Lady Blake of Leeds, and my noble friend Lord Bourne asked about the funding for the Insolvency Service. The Insolvency Service’s resources are not limitless. However, all cases are carefully reviewed and assessed to determine the degree of harm caused to the public and to business, with the most serious cases prioritised.

The noble Baroness, Lady Pinnock, mentioned compensation orders and my noble friend Lord Bourne asked about the steps to get directors to reimburse. I want to clarify that compensation orders may be sought for a creditor or creditors, a class of creditors, or as a general contribution to the assets of the company. These are the rules for insolvent company director cases now and we are seeking to extend the same rules to dissolved company directors. The amount and to whom the compensation is to be paid is specified in the order or undertaking. The provision in the Bill extends this to former directors of dissolved companies, although it is unlikely that the court would order a contribution to the assets of the company in such cases.

I will not have to write to my noble friend Lord Bourne, because I have found the relevant note—I hope that noble Lords appreciate that this is not my ministerial area and I am having to pick this up as I go along. My noble friend asked whether the new measure would deal with all fraud and not just the bounce-back loans, and it will. It will, for example, deter directors from the practise of phoenixing, where the debts of one company are dumped using dissolution and a new company starts up doing the same thing. It sets that precedent to deal with the specific example of phoenixing.

In response to my noble friend Lord Holmes on the wider reform of insolvency, the Government recognise the important work that insolvency practitioners do and are currently reviewing the regulatory framework that governs them to ensure that the best possible outcomes are achieved for creditors. As part of this, the Government issued a call for evidence in 2019 to seek the views of stakeholders on the impact of the regulatory objectives introduced for the insolvency profession in 2015. The Government will respond in due course.

There was a tremendous speech from the noble Lord, Lord Sikka, from which I learned an awful lot. He raised issues related to company and insolvency law. Obviously, a number of them go beyond the scope of this four-clause Bill, but we keep the wider company and insolvency law frameworks under constant review and will bring forward amendments to the House as and when needed. However, the noble Lord will know that the Government are considering wider reforms to the register of companies, and that work is ongoing. Unfortunately, it is above my pay grade to be able to approve an independent inquiry such as he called for, but I am sure he can engage with colleagues at BEIS and take forward some of those points, and I know that the team here is very aware of his concerns.

Gypsies, Travellers and Roma: Racism and Discrimination

Debate between Lord Greenhalgh and Lord Bourne of Aberystwyth

Thursday 25th March 2021 Lords Chamber

[Lord Greenhalgh (Con)]

I join the noble Lord in condemning those actions. I am very glad that his name was not caught up in that ridiculous policy. It is important that a full review of hate crime is carried out. The Law Commission started it last year and will be reporting to Ministers shortly on whether we need to build on the approach taken by the current hate crime action plan.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, following my noble friend’s comments regarding the Law Commission report on hate crime, and the consideration of proposals for reform, which the Government will be bringing forward this year, can he offer assurance that there will be thoroughgoing support and protection for Gypsy, Roma and Traveller communities, which—[Inaudible]—as demonstrated by the race disparity audit that we set up?

[Lord Greenhalgh (Con)]

My Lords, I am happy to give that assurance to my noble friend.

Covid-19: “Everybody In” Scheme

Debate between Lord Greenhalgh and Lord Bourne of Aberystwyth

Monday 11th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

I am delighted that the noble and right reverend Lord raised the excellence of the city of Manchester. That is an example of fantastic local leadership—fantastic. Sir Richard Leese, a long-time leader of the city of Manchester, is a fantastic local leader. Sir Howard Bernstein is a fantastic chief executive. What the city of Manchester does today is what other local authorities should do tomorrow. That is the message of the city of Manchester.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, I congratulate the Government on the success of the first rollout of the Everybody In scheme. It was highly successful and I hope that we are able to replicate that in the second rollout of the scheme. I would like to ask the Minister about vaccination, which he has referenced. What percentage of those accommodated through Everybody In in the first phase have registered with GPs so that we can ensure the vaccine rollout for this essential group? Unless we ensure that these people are registered, they will, I regret, slip through the system. I am sure the Government are on to it, but I would welcome some stats to back that up.

[Lord Greenhalgh (Con)]

I thank my noble friend for testing my statistical knowledge. Rather than plucking a number out if the air in my current disposition—where I cannot see particularly well—I would prefer to write to my noble friend on that matter. He is right; we do understand this, we have gripped the problem and we will provide the numbers to back that up.

Housing: Leasehold

Debate between Lord Greenhalgh and Lord Bourne of Aberystwyth

Tuesday 5th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, the noble Lord is a very wise man. I cannot give him any particular position on enfranchisement today, but it is important that we take these points into consideration before we adopt a formal policy position.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, I declare my interests as set out in the register. I very much welcome the Government’s commitment to acting in this area and I hope that it happens soon. As part of that action, will the Government also look at existing ground rent charges, some of which are set at unconscionable levels?

[Lord Greenhalgh (Con)]

My Lords, I assure my noble friend that some of the “fleecehold” practices that we have seen around ground rent escalations are absolutely abhorrent. That is one of the things that the Competition and Markets Authority is looking at, and I take my noble friend’s point very seriously indeed.

Fire Safety Bill

Debate between Lord Greenhalgh and Lord Bourne of Aberystwyth

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 17th November 2020 Lords Chamber

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

My Lords, I refer to my relevant commercial and residential property interests as set out in the register. I thank my noble friend Lord Bourne of Aberystwyth for his amendment, which shines a light on the important issue of electrical safety. Indeed, I thank the noble Lord, Lord Tope, for his clear focus and mission to prevent fires happening in the first place as a result of electrical faults as absolutely the key. I also thank my noble friend for the constructive meeting that we had on this issue last week, involving my noble friend Lord Randall of Uxbridge. I recognise the covering fire received from the noble Lords, Lord Tope and Lord Whitty, for this amendment, and in particular, as the noble Lord, Lord Kennedy of Southwark, mentioned, the work of the Electrical Safety First organisation. I commend the latter for the work that it is doing to raise awareness of the risks of electrical fires. I also thank the noble Lord, Lord Mann, for pointing out the issues around second-hand electrical goods; this is a particularly difficult area to regulate and something that we need to look into.

I will not reiterate all the points that I raised in Committee, but I will mention two concerns that I have in relation to this amendment. First, I note that the wording has changed to focus on high-rise buildings, but I am still concerned that it would not have the effect that my noble friend seeks to achieve. In particular, it is doubtful that the amendment would result in electrical appliances in private dwellings being brought within the scope of the fire safety order. This in turn will thwart the amendment’s underlying objectives for systematic checks on electrical appliances and for the responsible person to keep a register of appliances, as required by the additional schedule proposed in this amendment.

My other concern is that the amendment risks delaying the implementation of necessary reforms to fire safety regulation. A number of concerns have been raised in both your Lordships’ House and the other place about the pace of reform to fire and building safety legislation. We now have a package of reforms: this Bill, the upcoming fire safety order regulations, and the building safety Bill. The amendment would impact on the delivery of this package of legislation, and in particular on the fire safety order regulations.

A lot of the detail of this amendment is left to be implemented through regulations, and the work that this would require would lead to significant delays in our being able to deliver other key recommendations from the Grenfell inquiry. The answer to addressing the concern about electrical safety lies in the work that is being undertaken across government, which includes a number of strands. I will not repeat all of the work that I referenced in Committee but will pick out some key aspects.

A regulatory regime is in place on product safety, underpinned by legislation and overseen by a national regulator, the Office for Product Safety and Standards, which was created in 2018. This regime places responsibility for the safety of products on those actors best placed to ensure this before products are placed on the market. The draft building safety Bill reflects the role that all parties have to play in ensuring the safety of high-rise dwellings, from the developer to the accountable person to the residents themselves, and electrical safety is an important part of this. As mentioned by a number of noble Lords, there are standards for electrical checks in private rented accommodation, which require that electrical equipment is checked at least every five years. This is already in place for new tenancies and will apply to existing tenancies from 1 April 2021.

I recognise the concerns expressed by a number of noble Lords with respect to there being no mandatory checks on social housing. The inequality between social and private housing was raised by my noble friend Lord Randall and the noble Lords, Lord Shipley and Lord Kennedy. I am pleased to say that today we have published a social housing White Paper, which sets out our charter for social housing residents. It includes a commitment to undertake a consultation on keeping social housing residents safe from electrical harm. Among a range of issues, this will consider extending the safety measures already in the private rented sector to social housing.

I assure my noble friend that the Government take the issues raised in his amendment very seriously indeed. In that regard I am happy to give him a firm commitment that, outside the Bill process, my officials will engage Electrical Safety First and other key stakeholders in an official-led working group to inform the content of our consultation. Given the assurances that I have provided, I ask my noble friend to agree to withdraw his amendment.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, I first thank everybody who has participated in the debate on the amendments in this group. It has been a very worthwhile discussion, and every noble Lord who participated added something valuable. It is clear that there is broad support within the House for action, and a recognition of the inequality that exists between private tenants on the one hand and social tenants—and indeed owner-occupiers—on the other hand.

I note what my noble friend the Minister said in relation to some of the detailed points in the consideration of the amendments that may cause concern; clearly they are matters that could be looked at. I agree with my noble friend the Minister on the importance of what has happened today in relation to the White Paper, although I note that there is no timescale attached to that. Before I withdraw my amendment, which I am minded to do, I will press my noble friend a little on two matters. First, would he be willing to meet with me and the other signatories to the amendment ahead of the building safety Bill to see how we can dovetail what we are seeking to do here with that Bill? I know from discussions with him that he felt that that Bill was a more appropriate medium to use, so I seek that from him.

Secondly, I thank him very much for the undertaking that he has given to meet with Electrical Safety First, along with officials, to consider the proposals in the social housing White Paper as to possible timescales. He will understand that we are now three and a half years after the dreadful events of Grenfell. The social housing White Paper has been a long time forthcoming, for reasons that I do understand, and we are now looking at a future consultation; we do not—and I am sure he does not—want this stretching out a long time into the future. So I will just press him a little bit on those two matters before I withdraw my amendment.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I am very happy to give my noble friend the assurance that we can meet together before the introduction of the building safety Bill. Indeed, as soon as I have more information about the timescales in relation to the social housing White Paper being turned into legislation, I will be able to provide that to my noble friend. I am happy also to agree to meet with the Electrical Safety First organisation; I would find that very constructive indeed.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, I know my noble friend and I know his sincerity so, with those undertakings, I beg leave to withdraw the amendment.

Devolution: England

Debate between Lord Greenhalgh and Lord Bourne of Aberystwyth

Tuesday 28th July 2020 Lords Chamber

[Lord Greenhalgh]

We continue to recognise the importance of local leadership. Mayors provide that local accountability and an opportunity for people to select the local leaders they want to drive the economic recovery in their areas. That is the model that we propose to outline in our forthcoming White Paper.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, I note what my noble friend says about the White Paper, but can he update the House on progress on devolution to the Leeds/Bradford city region, which is much needed in my view?

[Lord Greenhalgh]

There has been a huge amount of progress. My honourable friend the Minister for Regional Growth and Local Government has announced conversations with York and North Yorkshire. The West Yorkshire deal has already been agreed and is about to be enacted, so a lot of progress has been made on a number of fronts.