(1 day, 5 hours ago)
Lords ChamberMy Lords, until my right honourable friend the shadow Secretary of State tabled his Urgent Question yesterday, we had heard nothing from this Government on Birmingham City Council’s bin fiasco. Birmingham, the UK’s second city, the pride of industrial Britain, is now reduced to piles of rotting waste and rats. We are seeing scenes akin to those I remember as a child in the strike-plagued 1970s.
Almost every area is suffering from overflowing bins, with 17,000 tonnes of waste said to be clogging up pavements across the city. Depots have been blocked by picket lines, delaying contingency collection vehicles from reaching the streets and, all the while, uncollected waste is increasing at nearly 900 tonnes a day. The threat of a public health emergency hangs over the city, a threat that demands urgent and decisive action. What are the Government doing to address this terrible situation? For 20 long days, nothing. When the residents of Birmingham needed a solution, the Government stayed silent.
This is a problem of the council’s own making; for too long, waste services have been a problem in the city. My son was at Birmingham University eight years ago and the recycling waste was not collected on his street for several months despite numerous calls to the council, and it has got worse. The flawed deal with Unite back in 2017, which then led to legal action over pay, built the foundation on which Birmingham’s mountain of rubbish sits today. Despite the Labour-run council knowing about this since then, it has failed to address the issue. That is why Birmingham residents find themselves with piles of waste in the streets.
What are this Government going to do to address these failings? On these Benches we are calling for a COBRA-led response—a co-ordinated effort across local and national government, harnessing the experience of emergency services and public health officials, where every resource is summoned to resolve this nightmare. Will the Minister confirm what discussions the Government have had within the department to resolve this emergency?
On these Benches, we are calling on the Government to engage with the private sector service providers to help clear up the mess and save residents from a disruptive bin strike with no end in sight. We need action today. I urge Ministers to pick up the phone to those complicit in holding Birmingham hostage to end this strike and restore cleanliness to their streets.
Unite has called on central government to make hundreds of millions of pounds available to the council. If that something the Minister is considering? What is more, is a council tax increase of 7.8% a clear breach of the Prime Minister’s pledge to freeze council tax? Does asking the residents of Birmingham to pay more while getting less show that Birmingham council has failed?
Now that Birmingham has declared a major incident, leading to the availability of new mechanisms, can the Minister confirm that she will meet with the council to ensure that those mechanisms are considered? We understand that the declaration should mean that the council will increase the availability of street cleansing and fly-tipping removal, but can the Minister confirm how many additional vehicles will be deployed in the coming days and what the department is doing to ensure that bin lorries can safely enter and exit the council’s waste depots? It is shameful, and a national embarrassment, that one of our nation’s great cities finds itself in such a bleak situation.
My Lords, 17,000 tonnes of uncollected household waste creating mountainous heaps of stinking rubbish on the streets of Birmingham is simply unacceptable—particularly in terms of the public health hazard that is created. As a result, and after three weeks of a strike by bin workers, the city has declared a major incident. It is expected that this will allow the council to implement a contingency plan to clear the waste mountain from the streets. So my first question to the Minister is: how confident are the Government that the waste will be cleared before the Easter holidays? Given that this emergency action has been taken because of the growing public health risk, how sure are the Government that diseases caused by a combination of rotting rubbish and rats can be prevented? My third question is: what are the public health risks faced by residents living in those parts of Birmingham where the rubbish mountains are worst?
The very challenging financial strictures facing the city council are of course one cause of this dire situation. The apparent failure to tackle the long-standing equal pay claims from women employed by the council is another contributory factor. Equal pay claims have been a challenge for councils across the country. Some resolve the problem by outsourcing: others, including my own council, resolved the absolutely unfair pay systems over 20 years ago by working with unions to agree a single pay spine and settling women’s claims for lost pay. |If that was 20 years ago, can the Minister explain how it is that, in Birmingham, equal pay claims were allowed to fester for so long?
I raise the significance of equal pay as the council cites it as a fundamental reason for not being able to settle the current dispute. Can the Minister comment on whether Birmingham City Council has finally resolved historic equal pay claims and whether existing pay for all employees is on a fair footing?
It is of course right to acknowledge that Birmingham has had a reduction in its core funding of 40% or more, which has left the spending level per person 19% lower than 14 years ago. In more deprived areas, the loss per person is nearer to 26%, according to a report from the IFS. Clearly, the huge loss of funding has put the council into very difficult circumstances. Eleventh-hour additional funding from the previous Government helped forestall the financial collapse of the city council. As a consequence, very difficult decisions have had to be made. Can the Minister confirm that major change to support council finances is needed and will come?
Finally, it has to be asked whether Birmingham City Council is too large. It serves 1.2 million people, which makes it the largest local government authority in Europe—double the size of the next largest in this country. With just 101 councillors, each one serves over 12,000 people. Can the Minister explain how community representation can occur under these circumstances? The reason for the question is that the different needs and aspirations in a council of that size are hard to meet when elected representation is on that scale. It seems likely to have contributed to the problems now being faced. Does the Minister agree?
Birmingham is a great city. It needs the support of the Government and Opposition in aiding a recovery. I look forward to the questions asked being answered, either now or in writing.
I thank both the noble Lord and the noble Baroness for their questions. I will elaborate on the Statement a little but, before I do, the tone taken by the noble Lord, Lord Jamieson, showed no acceptance of the 14 years of funding withdrawal from local government. That is at the heart of this problem.
I would like to update the House on the statutory intervention at Birmingham City Council, which was part of the reason for this Statement in the other place, and on issues affecting the waste service, following the Statement made by my honourable friend the Minister for Local Government and English Devolution in the other place yesterday. This Government were elected on a manifesto that pledged to fix the foundations of local government and we have set about doing that with some energy. The public rightly expect and deserve well-functioning local councils that provide the essential statutory services that residents rely on.
Local councils must be fit, they must be legal and they must be decent. Commissioners have been working with Birmingham City Council for the last 18 months to support the council in its recovery. Their latest report on that progress was published by the Government yesterday and lands at a point of acute difficulty for residents in Birmingham. As we know, the ongoing waste dispute is resulting in rubbish piling up in the streets, so I will also take this opportunity to give the latest update on the status of that dispute.
The council has taken important initial steps forward on its improvement journey and is working constructively with commissioners. It has made significant progress in addressing historic equal pay issues and fixing the foundations of its governance. The leader, Councillor Cotton, and his group are taking difficult decisions to get the council back on track. The commissioners have recognised that, and that his calm leadership through stormy waters is definitely moving the council forward. The new managing director, Joanne Roney CBE, has brought a steady hand and is beginning to make permanent senior appointments that will contribute to that much-needed stabilisation. The council has also achieved a breakthrough by achieving an agreement to settle the outstanding claims to end the ongoing equal pay saga. It has also set a reimplementation strategy for the Oracle system, which was part of the issue there.
That improvement is encouraging, but deep challenges remain. In the short term, commissioner oversight and close supervision will still be required to maintain the momentum that has started to build. There is a difficult road ahead on the key aspects of the best value regime—governance and culture, financial management and service delivery—because substantial risks threaten the journey to reform and recovery.
As we all know, there is a live industrial action in waste services involving one of the three unions recognised at the council. The Government will support the leader and his team at Birmingham, directly and through the commissioners, to move the council on from these historic issues. That includes an increase in core spending power of up to 9.8%, or £131 million, for 2025-26, including £39.3 million of new one-off recovery grant, illustrating the Government’s commitment to correcting the unfairness in the funding system; and an “in principle” agreement to the exceptional financial support, totalling £1.24 billion.
The noble Lord, Lord Jamieson, raised the issue of council tax, but actually it was his Government who signed off a 10% council tax increase in Birmingham last year. That was more than the council put up its council tax by this year.
Councils deliver more than 800 services and make a huge difference, but it is accepted that for many, the most visible and universal service is the collection and disposal of household waste. Many noble Lords know that the current industrial action in the city is causing misery and disruption to local residents. I am not going to make light of that; I know how difficult it is for them.
From the outset, we want to be clear that statutory intervention is led by commissioners and Ministers, who cannot legally intervene in the industrial action. The Minister for Local Government and English Devolution has been in regular contact with the leadership of the council throughout as it has sought to find a resolution which, importantly, maintains the reforms needed to build a sustainable council and which also returns waste collection to a normal functioning service. This is causing public health risks to the city’s most vulnerable and deprived and, as a result, yesterday Birmingham declared a major incident to give it the mechanisms to better manage the impact on residents. I support that decision, and this Government will back local leaders to bring the situation back under control in the weeks to come.
The Government will not hesitate to provide support in any way that Birmingham’s leaders need and, as Parliament would expect, a meeting with the leadership of the council, the commissioners and other key local partners is taking place to make sure that we are doing everything we can to protect public health. I spoke to Councillor Cotton myself this afternoon to ask him if there is anything further he wants us to do.
It is in the interests of all parties—and, most importantly, the people at the heart of this, the residents of Birmingham—that the industrial action is brought to a close in a meaningful and sustainable way as soon as possible, and we encourage all parties to redouble their efforts, get round the table and find that resolution. Councillor Cotton confirmed that live negotiations are ongoing; that work is still continuing. To do this, any deal to end industrial action must maintain value for money and ensure a fit-for-purpose waste service, without creating or storing up liabilities for the future. All parties recognise that Birmingham’s waste service has been in urgent need of modernisation for years. Any deal reached must not repeat the mistakes of the past.
Practices in the waste service have been the source of one of the largest equal pay crises in modern UK history, resulting in costs of over £1 billion. This situation simply cannot continue, and that is what needs resolving, and resolving urgently. Our Government will support the council in its journey to creating the sustainable, fair and reliable waste service that the residents of Birmingham deserve. We will support the council to resolve historic issues and to continue to establish the leadership, governance and culture that will transform the services and deliver good-quality public services for the people of Birmingham.
On the noble Lord’s specific questions and his comment about failing to address the issue, there have been consistent meetings and discussions with Birmingham throughout this situation to make sure that we give it any support it needs, but it is right that it should be Birmingham City Council’s decision to enable co-ordination between public sector partners on the ground in Birmingham. That is why it has declared this major incident—to ensure that public safety and health is restored. While the situation in Birmingham is clearly very serious and deteriorating, the declaration of a major incident is a well-established mechanism for ensuring that public sector partners can co-ordinate locally to deliver a resolution.
The noble Lord asked whether COBRA would be convened. COBRA is used for significant crises which require a collective government response, co-ordinated at the centre by the Cabinet Office. We are in regular contact with Birmingham City Council, and local leaders are confident at the moment that they can manage the situation. Should this change, we stand ready to respond to any ask for support.
The noble Lord asked how many bin lorries are active. He will be aware that one of the issues was the blocking, as part of the strike action, of bin lorries’ entrance to and exit from the depot. We are hoping that that can be resolved as the negotiations go forward. I cannot tell him off the top of my head exactly how many bin lorries are able to operate, but I shall come back to him in writing on that.
The noble Baroness asked how confident we are that waste will be cleared before Easter. We all want to see this situation resolved as quickly as possible. I hope that, with the good will of all parties, and given that they are still in negotiations with each other, we will be able to resolve this dispute sooner rather than later.
The noble Lord asked about sending in staff or giving extra money to help clear up the rubbish, and whether we would send in private contractors to do that job. As you all know, I am a firm believer in devolution and in letting local people sort the issues out locally. It is right that the response is led by the area’s key public sector partners. We are in regular contact with those local leaders, and negotiations are still open.
On the issues relating to public health, the director for public health at Birmingham City Council is part of the response, and the impact assessment of the strike is closely monitoring the situation on the ground and will continue to do so. The UK Health Security Agency met with the director for public health yesterday and will remain in close contact to ensure that all parties are well informed.
Issues were raised about equal pay, and of course, the noble Baroness is right to say that we needed to resolve those. They were entrenched and affected some of the female workers in Birmingham enormously. We have to give credit to Birmingham for working its way through what has been a very long and hard process. I have gone through one of these equal pay settlements myself. The trade unions have been involved in resolving most of the issues; this is that last part of that process, and the matter is still outstanding. As I say, we urge everyone concerned to get round the table and resolve this now.
I hope that that has answered all the questions. The noble Baroness asked about the size of the council. We are going through a process with all councils of discussing how we take things forward, but it is important that, at the moment, we leave the commissioners and local leadership in Birmingham to do the work they need to do to turn the council around. That work is progressing well; there is still a lot more to do but a lot has been done already, so I hope we will get to where we need to be.
The noble Baroness also referred, rightly, to funding cuts. Birmingham City Council received the sharpest cuts of any council in the country. Because it is the biggest council in the country, the ripple effect that we all felt in local government from the horrendous hollowing out under the last Government hit Birmingham like a tsunami, so I do not think the Benches opposite have much right to criticise what went on there.
My Lords, I apologise: I failed to declare my interest as a councillor in Central Bedfordshire.
(1 week ago)
Lords ChamberMy Lords, I shall speak to Motion N1. We have already had reference to this, but I have noted the Commons’ objections to my amendment on Report, and I have revised it and wish simply to sketch the alterations. This revised amendment, therefore, is about reviews exclusively—first, a review of the £500,000 threshold of rateable value, which is the cliff edge that the noble Baroness, Lady Pinnock, referred to, and the impact it will have on businesses. This is a vital review because at present, it will be untenable for organisations that just exceed the £500,000 rateable value and will be compelled to pay a higher band of rates. The second review concerns how to address the appropriate tax rateable value on the big warehouse retailers—the internet retailers such as, but not exclusively, Amazon. Fairness between the high street and these big-box retailers is what we seek. We want to establish a new use class, purely for the benefit of business rates and no other reason, but without insisting upon implementation, which was in the previous amendment and rejected in the other place. The Government will then be able to apply the new rateable value to these big gorilla retailers at the flick of a switch at any time in the future, but they are not compelled to do so.
All sides of the House want fairness for the high street against these big retailers. Let us not duck it or leave it in the long grass. I am afraid I am not convinced by the comments of the Minister so I, in turn, wish to press my Motion at the appropriate time.
My Lords, I declare my interest as a councillor in central Bedfordshire. I rise to speak in support of the noble Lord, Lord Thurlow, and his Motion N1. The noble Lord has been persistent in his efforts to get the Government to listen and bring forward a serious review of the case for a separate use class for retail fulfilment centres that are not on the high street. He is an excellent example of a Peer who brings his experience and expertise to your Lordships’ House. As a professional chartered surveyor, he has brought that expertise to bear during the debates on the Bill, and I am very grateful to him for that.
The Bill fails to deliver on the Government’s manifesto commitment to replace the business rates system and level up the playing field between the high street and the internet giants—a so-called Amazon tax. It fails on both counts. The reviews proposed in this amendment would provide the basis to achieve this. The new £500,000 threshold for the higher multiplier is a blunt tool that will impact many organisations that were never intended to be hit with higher business taxes. It does not deliver on the Government’s objective of targeting online giants. I have consistently made the point that a £500,000 threshold is a cliff edge that will create perverse incentives at the margins, disincentivising investment, particularly on the high street.
The noble Lord, Lord Thurlow, has gone further arguing forcefully that the Government must review the case for a separate use class for retail fulfilment centres that are not on the high street. I am grateful to him for including my concerns about the impact of the £500,000 threshold in his Motion N1, and I am pleased that my party will vote for it should he choose to test the opinion of the House.
My Lords, I realise that I omitted to refer to Motion P1, which is in the same group. It is consequential on Motion N1 and will depend on the outcome of that Division.
(1 week, 1 day ago)
Grand CommitteeI thank the Minister for her explanation of how we got from there to here; its clarity is welcome. I also thank the noble Lords, Lord Shipley and Lord Young of Cookham, for their forensic questioning, and I look forward to the Minister’s response. We on these Benches are in agreement that projects in the national interest, especially those deemed urgent, must and should be expedited as swiftly as possible. We are also in agreement that the present system has failed to deliver the improvements necessary to promote economic growth and improve the productivity of our vastly unequal regions.
Subsidiarity, a word we do not hear very often, cuts to the heart of this SI and the changes it introduces. Decisions must and should be taken at the most appropriate level, proportionate to the impact of the decision, which this SI attempts to do. Only time will tell whether it has been successful.
However, to me, this is a two-way street, with powers devolved down as well as taken up. It is nothing short of madness that when I was an elected mayor, I had to go through a four-year torment and two judicial reviews needing the Secretary of State’s approval—of which there were many during those four years—to be able to turn an allotment site into much-needed facilities for our local hospital. Conversely, it is also unacceptable that plans to build a third runway at Heathrow have been in discussion for decades. Evidence abounds that something needs to change and the system is failing. I am therefore interested in the Minister joining the dots for me as to how the new regional super-mayors will be involved in this process, given that the Government are also giving them greater planning powers.
We can also see how this joins up to the Government’s broader agenda. We have all lived through the Crown Estate Act and agree with its aims to use land—we look forward to the clarification mentioned by the noble Lord, Lord Young of Cookham—to create lasting and shared prosperity for the good of the nation as a whole. We can see how the SI is designed to drive through nationally significant projects at pace. However, the then Opposition, us included, were greatly concerned that such powers would be used only when necessary and with appropriate safeguards in place.
We will have to watch to see whether the safeguards and processes envisaged by these changes are effective, and whether the definition of “national importance” has been consistently applied and the criteria as laid out adhered to. Perhaps the Minister can give us some examples of what applications constitute a matter of urgency and warrant an expedited planning process.
Our overriding concern is the need for accountability and transparency. Can the Minister clarify what is envisaged—in the words of the Minister in the other place—to ensure that
“the House as a whole”
will have
“the opportunity to consider and scrutinise their general operation”?—[Official Report, Commons, 13/2/25; col. 33WS.]
Is this for each application or the generality of the process? To paraphrase my noble friend’s question, we would seek clarity on the review.
There are legitimate concerns around the erosion of local democracy—of not listening to local voices and their elected representatives. Can the Minister reassure us that all voices will be heard and consultation will be wide ranging, as appropriate to the application? I underline that phrase. Does the Minister agree that the undeniable right to be listened to and consulted does not confer a right of veto?
I am unconvinced that a retrospective annual report in the form of a letter of decisions taken, placed in both Libraries, fulfils the commitment to make sure this is scrutinised and accountable. We are looking forward to the changes to come in the context of the new Planning and Infrastructure Bill, which I am sure we are all eagerly looking forward to—or not. However, that is an argument for another day. We support this SI, with caveats on future scrutiny and transparency.
My Lords, as usual I declare the fact that I am a current councillor in Central Bedfordshire. I thank the Minister for her explanation on the SI and the reasons behind it. Like my fellow noble Lords, I recognise that we need to get on with these major infrastructure projects. The noble Baroness, Lady Thornhill, gave the example of Heathrow, but one can also think of the Lower Thames Crossing, which I understand has received approval just today, after about 800 million pages of planning documents.
It is important that we do that, so in principle we support the need for the SI. The Minister has reiterated to us how important it is to get on with these things, but to do so by completely ignoring the public and the local planning process is a concern to this side of the House. We really want the assurance that it will be done only in exceptional circumstances and where speed is absolutely necessary. We recognise that the planning process is far from perfect; I too look forward to debating the Planning and Infrastructure Bill. This very much seems to be a mechanism to shoehorn through a process in a system that does not work. We really ought to look at making the system work.
I very much look forward to hearing the Minister’s comments on why it is so necessary to do that and her assurances on why it is necessary to circumvent local planning processes and local transparency. I also support the calls from fellow Peers that local involvement should be maintained and representations to the Minister should be still able to be made.
I was assuming that it would be an application made on land already owned, but I will write to the noble Lord and set that out in further detail.
On his other point, my understanding is that all things are, technically, judicially reviewable, but I will find out the detail of that and set it out. Obviously, if we are going to put an urgent and national process in place, we want it to be able to speed through as quickly as possible, but, in the planning world, it would be most unusual for there to be no process of review should that be needed. I will get our planning team to check that for the noble Lord, and I will write to him with the exact details.
I have a question; it is not dissimilar to the one from my noble friend Lord Young. As I understand it, from what the Minister has laid out, it will in essence be up to the Minister or Secretary of State to determine whether this is urgent, nationally significant and so on. My real question is: what constraints will there be on him or her in determining that? Where is the opportunity to challenge, review or assess? I know that the Minister is going to come back on the issue of judicial review. Clearly, we do not want to have an urgent process be bogged down by it for two or three years; however, we would want some constraint on it. So what process is in place to ensure that the Minister is not in a position to determine all of this by himself or herself?
I am grateful to the noble Lord for reiterating those points. I set out that there is a set of criteria deeming whether an application is of national importance. The applicant will need to say which of those criteria they are using to say that it is of national importance. The same applies to the urgent procedure: the applicant will need to demonstrate one of those criteria for it being urgent, and the Secretary of State will decide whether or not that is the case. Out of the criteria I set out, the applicant will need to demonstrate that at least one applies. That is how it is going to work. I will have to come back to noble Lords on whether it will be reviewable.
In conclusion, the two new routes for planning permission that we are seeking to implement are necessary and timely; all noble Lords agree with that, I think. These regulations represent a crucial step to their delivery. I hope that the Committee will welcome the regulations, which address this critical requirement for a proportionate planning procedure for nationally important Crown developments.
(1 week, 2 days ago)
Lords ChamberMy Lords, I support the spirit of all three of these Motions and I especially commend the noble Baronesses, Lady Jones of Moulsecoomb and Lady Pinnock, for making their Motions fatal. I was interested to hear the noble Lord, Lord Kerr, reassure us and tell us, in effect, not to worry our pretty little heads and to stop panicking—he did not use that language, I am. It was then interesting that there was quite a lot of laughter on the Benches opposite; there is this sense of, “What is all the fuss about?” I suggest that this is not a game and it really matters for voters. There is a lot at stake here, not least the reputation of the democratic process.
For the last week or so, Government Ministers have talked about a fictional drama as though it is factual evidence, concluding that a Netflix series should inform policy on countering the radicalisation of young boys, so maybe the Government will accept my factual, if anecdotal, evidence of how the cancellation of council elections is fuelling the radicalising of young people to become cynical about democracy. I was recently giving a talk to a student group about the importance of democratic engagement to a free society, and I was taken aback by just how cynical they were. The majority said, “Democracy is a sham”—that was the popular sentiment. I was even more surprised when their evidence centred on councils, not something that the young generally chat about. One of them summed it up when he said, “They cancelled the Romanian presidential elections and banned the popular candidate from standing. Now our Government have cancelled the council elections because they are scared that austerity Labour will get a drubbing”. Whether we like it or not—and I argued against that slightly conspiratorial tone, by the way—we can see why they might draw that conclusion.
Beyond those young cynics, there is a lot of anger about this issue. Five and a half million people feel that they have had their votes cancelled and they feel cheated. It is being discussed in workplaces, in the pub, on phone-ins and on social media. People will say things like, “There are challenger parties doing well in the polls. They don’t want to see how they get on”. There is a certain volatility around politics at the moment and people want to make their views heard. People are frustrated that, for example, just when voters are facing council tax rises and horrible cuts in local council services, they do not get a chance to comment locally. In rural areas, where those on family farms are so worried about recent policies, so worried that their livelihoods are going to be destroyed, they do not get a chance to vote. We have been told that these are being postponed for only a year, but a lot can happen in a year: in less than a year, some devastating policies have been brought in by the Government that people might have a view on. That will be true as well, so I would rather that people were given a vote, even if then they had to have the election again, than just be told, “Don’t you worry, you’ll get a vote eventually”.
Local issues matter to people. If noble Lords were listening this morning to the discussions on the media about rats as large as cats and the bin strike in Birmingham, they will have heard people passionately talking about what is happening in their local area. We have to understand that people want their voices and their views to count, and many feel robbed by this decision. They do not want to be fobbed off by technical excuses about the importance of devolution and somebody at the top making a decision that will give them more democracy at some time. They are basically being told that voters’ access to the ballot box should be trumped by a policy reorganisation. Also, as the noble Baroness, Lady Jones, suggests, it seems to make a mockery of the notion that these devolution changes will bring more accountability.
The lack of consultation mentioned by the noble Baroness, Lady Scott of Byford, is especially egregious. Although I have a lot to say on devolution, on these devolutionary forms and their shortcomings, now is not the time and I will not say it now, but I think it would be wrong for the Government not to at least note that people feel that this is a contemptuous disregard for voters’ aspirations to exert their rightful right to vote for or vote out politicians as they choose, as they expected to. They are disappointed and many people are actually looking at parliamentary TV, for once, to see which way we go today. Who would have thought that that would happen? But there you go.
My Lords, I declare my interest as a councillor in Central Bedfordshire who is not participating in this process. I speak in support of the regret Motion tabled by my noble friend Lady Scott of Bybrook. As chairman of the Local Government Association, I campaigned vigorously for greater devolution, and I am still very supportive of devolution. I also led a unitary council for 10 years and can testify to the benefits of unitary councils. However, if we are genuinely to have devolution and well-run services, it needs to be locally led, with real powers and local accountability. We cannot treat local government as little more than a delivery arm of central government, tied up in regulation, with budget controls and with central targets and funding pots.
When this country saw the biggest improvement in health, education, social support, infrastructure and so forth, it was all locally led. If you go back to the turn of the 20th century, local government was truly empowered, delivering education, health, social care, social support, infrastructure and even gas and water supplies. It was genuinely financially independent of central government. Over the last century, central government has steadily eroded the role of local government, placed more controls and reduced its financial freedoms while increasing burdens on local councils.
I am a believer that form should follow function. We should see real devolution which would enable genuine financial independence from central government, with a much greater role in economic development, community health, education and skills for getting people back to work; this would enable every area to flourish with real levelling up. This is what the Government should have started with, because locally we could have then answered the question of what would be appropriate structures to deliver this. It would also significantly reduce local argument as the prize and objective would have been clear to all.
Instead, we have top-down reorganisation. The Government have been clear that they intend to use their large majority in the other place to force through unitarisation and have mayors across the country. There is a clear message that funding will be tight, so councils will have to make significant savings, which the Government expect to be delivered by unitarisation. It is understandable that, in these circumstances, many councils have concluded that it is better to participate in order to have some control over their destiny and potentially some meagre rewards, rather than be done to by government diktat.
So I have sympathy with those councils that, due to the need to meet a government-imposed timetable, asked for a delay in their elections. But it did not need to be this way. The Government could and should have worked with local government. They should have brought forward real proposals for real devolution with a clear timetable that respected the democratic process. They should have brought forward proposals to address some of the biggest issues in local government, such as social care and SEND. They should have looked at how, by addressing the perverse incentives, the blockages in the system and creating genuine local place-based working, these could have been addressed.
You cannot look at local government reorganisation without looking at, for instance, the healthcare system and how that works. But, no, this Government are favouring imposition over co-operation, avoiding the difficult decisions and not delivering real devolution. That is why I will be supporting by noble friend Lady Scott’s Motion to Regret.
My Lords, that has been a really interesting debate. I understand and I have listened to the concerns around the Chamber. The Government have been very clear on our manifesto commitment to widen devolution to more areas. We have been clear on our vision for a simpler, more sustainable local government structure, alongside transfer of power and funding out of Westminster through a devolution process. We have been clear on our willingness to take all the appropriate steps needed to deliver this vision, working with councils to fix the foundations of local government and support communities to join the devolution revolution.
(2 weeks, 1 day ago)
Lords ChamberMy Lords, the noble Earl, Lord Lytton, is right to challenge the Government’s intentions in relation to saving our high street. The Government are in a quandary: retail, hospitality and leisure businesses have continued to benefit from Covid-related relief, which is currently at a rate of 75% but will fall to 40% from April and not exist in the following year. The challenge for the Government then will be to square the circle of the commitments made.
The slogan of saving the high street depends on ensuring that businesses at the heart of the high street are not priced out of financial viability by large changes in business rates—hence the Bill. However, the evidence from Wales and Scotland—which have and have used the right to alter the Covid rate relief in a previous year—is that the effect of the reduction in Covid relief was a rise in business closures above what would normally be anticipated.
As will be debated in the next group of amendments, large retail stores are an essential ingredient for a thriving shopping centre in a city, large town or retail park. It is already clear that retailers are moving more and more of their business online, partly in response to consumers but also as a consequence of the rising costs of bricks and mortar retailing—our high street that the Government intend to save. The high street will not be saved unless these larger stores are classified with all other RHL properties and charged the lower multiplier. A failure to do so simply underlines the Government’s inability to appreciate the rising taxation burden imposed on high street retailers.
Amendment 32 in the name of the noble Lord, Lord Thurlow, seeks to push the Government into wider reform of the system to fulfil the promises made about charging more to fulfilment warehouses—the Amazons of this world—to help level the playing field with traditional retailers. As the Minister knows, I have regularly provided evidence of the iniquity—I should have said inequity, but it is probably iniquity as well—of the business rating system, which has failed to be radically changed in the face of the online revolution. If the noble Lord, Lord Thurlow, wishes to test the opinion of the House on his proposals to push the Government into making deeper and lasting reform of the property taxation issue, we on these Benches will support him.
My Lords, I declare my interest as a councillor in Central Bedfordshire. I will speak to the amendments in the names of the noble Earl, Lord Lytton, and the noble Lord, Lord Thurlow.
Amendments 2 and 11 are broad amendments that seek to retain the standard multiplier for all retail, hospitality and leisure hereditaments, rather than them facing higher business taxes. The noble Earl, Lord Lytton, is right to raise the issue of higher taxes on RHL businesses above the £500,000 threshold, as the Government’s stated policy intentions are not reflected in the reality of this Bill. We share similar concerns about the impact that this will have on high streets, which is why my noble friend Lady Scott of Bybrook has tabled an amendment to protect anchor stores and I have tabled an amendment on the cliff-edge effects of the £500,000 threshold.
Amendment 32 in the name of the noble Lord, Lord Thurlow, seeks to introduce a review of the introduction of a specific use class that targets businesses that operate solely out of fulfilment warehouses—the Amazon tax. The Bill does not deliver on the Government’s manifesto commitment to ensure that online giants are paying their fair share of business rates. Indeed, we expected this Amazon tax to be introduced through this Bill, and it is disappointing that the Government have not delivered anything close to such a reform in this legislation. As such, we will support the amendment from the noble Lord, Lord Thurlow, should he choose to press it.
My Lords, I thank the noble Lord, Lord Thurlow, and the noble Earl, Lord Lytton, for a very constructive and positive meeting yesterday. This group of amendments seeks to amend the approach taken in the Bill regarding the targeting of the higher multiplier. They would require the removal of qualifying retail, hospitality and leisure from the higher multiplier and commit the Government to undertake a review of the merits of creating an additional multiplier and use class for fulfilment centres of retailers that do not have a material presence on our high streets. As set out at the Budget, the Government intend to introduce a permanent tax cut for qualifying RHL properties from 2026-27 by introducing two lower RHL multipliers for these properties that have a rateable value below £500,000. The Bill makes provision to enable this through secondary legislation.
In consideration of the challenging fiscal environment that this Government face, it is important that the permanent tax cut is funded sustainably, which is why the Government intend to introduce a higher multiplier to fund the tax cut from within the business rates system. It is the Government’s intention for the higher multiplier to apply to all properties with a rateable value of £500,000 and above. This ensures that sufficient funding is raised to enable the Government to provide that permanent tax cut for RHL properties with rateable value below £500,000. I thank noble Lords here today for their contributions on this topic.
The Government recognise that a small number of RHL properties fall above the £500,000 threshold. However, the helpful information published by the Valuation Office Agency shows that this is comparatively small. As per the current rating list, of the 16,700 properties in England with a rateable value at or above the £500,000 threshold, a little over 3,000 fall into the shops subsector. There is more behind this: of those falling into this subsector, around 72% are supermarkets, large food stores or retail warehouses. That leaves fewer than 1,000 stores, of which around 600 are located in London and the south-east. For most other regions, the number of shops affected is fewer than 50.
A similar pattern is present when looking at hospitality and leisure sectors. That data also shows that 670 hereditaments fall into the assembly and leisure subsector, of which 380 are located in London and the south-east. Only 550 fall into the hotels, guest and boarding, and self-catering subsector, of which 450 are located in London and the south-east. So the impact is not widespread when it is considered that there are over 450,000 shops; over 80,000 hotels, guest and boarding, and self-catering properties; and over 180,000 assembly and leisure properties with a rateable value below the £500,000 threshold. It is imperative that any tax cut is funded sustainably, so the Government do not intend to remove any properties from the higher multiplier.
Against the challenging fiscal environment, the Government have to take tough decisions. This is the fairest approach that ensures a sustainable solution to ensuring that the permanent tax cut for RHL properties can be funded from within the business rates system. For these reasons I cannot accept the amendments from the noble Earl, Lord Lytton, and I respectfully ask him not to press them.
I turn to Amendment 32 from the noble Lord, Lord Thurlow, and I appreciate his interest in Burnley warehouses. This amendment also concerns the new multipliers and how we might target online retailers that operate from large distribution warehouses and tend not to have a presence on the high street. This matter has attracted interest not just during the passage of the Bill but in the course of several reviews of business rates over recent years.
My Lords, in moving Amendment 5, which is in the name of my noble friend Lady Scott, I shall speak to Amendments 18 and 20, which are consequential. The amendments seek to introduce an increase in the threshold for the higher multiple, in line with the average aggregate increase in rateable values in the three years preceding the re-evaluation of the business rate multipliers. I am concerned that the Bill will introduce a stealth tax that will result in more and more businesses being subject to the higher multiple, if the higher multiple is fixed at £500,000 and does not increase with rateable values.
I listened to the points raised by the Minister in Committee and adjusted the amendment so that it considers the re-evaluation that will take place in 2029. Although the Minister claims that an alternative system will be introduced, this is uncertain. As such, it makes sense to introduce protection in the Bill.
Amendments 7, 15 and 19 seek to introduce into the Bill the definition provided for the RHL relief, which seems unnecessary given that the definition already exists in government guidance.
I look forward to the response from the Minister on the issues that have been raised. I beg to move.
My Lords, Amendment 7 and consequential Amendments 15, 19 and 22 probe the Government on the definition of retail, hospitality and leisure businesses. This is absolutely critical because those businesses currently receive 75% relief, which will fall to 40% in April, and the relief will be non-existent by April 2026. The Bill introduces the lower multiplier by way of reducing the impact of the removal of the Covid relief. It then becomes crucial for businesses to know which multiplier will apply to them.
The House of Commons Library’s detailed briefing stated that there is currently
“no definition in law of ‘retail, hospitality and leisure’ properties”.
It would be really helpful if the Minister confirmed that this essential definition will be determined in secondary legislation.
Throughout deliberations on the Bill, the Minister has repeated that RHL properties in the new regime are identical to those that received Covid relief. If that is so, surely the legal definition must already exist and can be shared in our debates on this group of amendments.
During the debate in the other place, Daisy Cooper MP wanted to know whether large RHL businesses that currently have a £110,000 cap on the Covid relief received will have that cap removed and benefit from the lower multiplier. If that is the case and they get the cap on their relief removed but also benefit from the lower multiplier, it will mean that smaller businesses end up subsidising the larger chain stores within this definition of RHL. Again, I feel sure that it is not the Government’s intention to let small shops subsidise larger ones. If that is not the case, can the Minister explain what is going on?
Can the Minister confirm that the new rating system being introduced in April 2026 will be fixed for three years, as he stated in earlier debates on the Bill, and that the small business relief will be uplifted in line with inflation? That is very important for small shops in villages and small towns. Currently, rateable values of less than £12,500 receive 100% business rates relief, and then a sliding scale exists. It is therefore critical that the rateable values are revised upwards to reflect property values. Otherwise, ever fewer businesses will qualify—fiscal drag for business rates. This is also the argument made by the noble Baroness, Lady Scott, in relation to the higher threshold being introduced. Failure to increase the £500,000 threshold results in pulling more businesses into the higher rate.
In the end, as we have heard from across the House this afternoon, tinkering with the system fails to address the fundamental problem that businesses are not what they were 100 or even 20 years ago, and property taxation must change to create a fairer, more equitable approach that does not penalise traditional businesses, which end up providing a larger portion of the tax take than is justified.
I alluded to this point in Committee. The review with stakeholders and businesses is currently taking place. We will come back as we look at the reform of business rates. In the context of the business rates review and reform, consideration is being given to hereditaments that are near, above or within a small distance of the £500,000 threshold.
My Lords, I thank the Minister for his response. Although we remain concerned regarding the increased business taxes as a result of the impact of fiscal drag, having reflected on the Minister’s assurances we will not be pressing Amendment 5.
My Lords, all the amendments in this group provide for reviews of different aspects of the Bill. In moving Amendment 21, I will speak to Amendment 33 in my name and that of the noble Baroness, Lady Pinnock.
It is very clear from everything that we have heard in Committee and on Report that we are still very much in the dark as to how this Bill, when it becomes an Act, will affect our high streets. It was billed from the beginning as a measure that would save our high streets—that was clearly how it was marketed in the Commons. However, without the details that we seek, and without the context of those details, we really do not understand.
The differences between these several amendments are, more or less, on the timing of when the review would happen. In our Amendment 21, the timing is that, before the Act comes into force:
“The Secretary of State must publish and lay before Parliament an assessment of the impact of sections 1 to 4 of this Act on businesses, high streets, and economic growth”.
If the Government are serious about their assertion that they are going to save our high streets, they need to be able to support that. Nothing the Minister has said at any point has underpinned that this will save our high streets.
An impact assessment must consider the impact on different types of businesses, including small ones, and the impact on businesses operating mainly or solely on high streets, and whether the provisions will have a measurable impact on economic growth. That is the key because, from everything my noble friend and others have said, it seems that at the end of this process most businesses will be paying more in rates than they are currently paying—and how that delivers any kind of economic growth is something of a mystery to me.
So that is the nature of Amendment 21. We also support the other amendments in this group. Amendment 24 in particular requires the Secretary of State to review the impact on
“businesses whose rateable value is close to £500,000”.
That of course brings us to the plateau issue. I will leave the noble Baroness on the Conservative Benches to speak to that, but in the event that she decides to push the amendment to a vote, we on these Benches will support it. I beg to move.
My Lords, I rise to speak to Amendment 23, in the name of my noble friend Lady Scott, and Amendments 24 and 34 in my name. Amendment 23 seeks to include a review of the impact of this Bill on businesses. The lack of any kind of assessment of the impact that this policy will have on businesses needs to be addressed—hence this amendment.
Amendments 24 and 34 seek to include a requirement for a report on the impact that the £500,000 threshold will have on businesses. I am particularly concerned about the cliff-edge nature of the £500,000 threshold and its impact on business decisions. A business crossing the threshold, even by £1, will see an almost 20% increase in business rates payable. This is bad enough for most businesses, but a business in the retail, hospitality and leisure sector will see a near doubling. For instance, an RHL business with a hereditament of £495,000 that invested in its property just enough to push it over the threshold would potentially see an increase in rates from around £175,000 to £325,000 as a result of the Bill. This is meaningful in terms of business decision-making.
Not only is this unfair but it is a distorting tax. This Government say their priority is growth, but think about all those businesses up and down the country facing this dilemma and the impact on their individual decision-making. I thank the Minister for his engagement on this and I appreciate that this is being driven by the Treasury and its simple spreadsheet analysis. However, these are real decisions with real-world impacts, not simply numbers on a spreadsheet.
This Bill was initially presented as one that would increase the tax share of out-of-town warehouses, dubbed the “Amazon tax”, but that is not the Bill we have been presented with. As the Minister has said previously, only around 10% of businesses paying the higher tax will be warehouses. This Bill will actively encourage businesses to stop investing in their property to avoid paying a hefty increase in business rates. We want to develop our high streets. We want to encourage businesses to invest. This not only disincentivises that critical investment but creates a perverse incentive at the margin.
(3 weeks, 2 days ago)
Lords ChamberTo reiterate a point I have made before, local authorities are part of the whole process. They will work with central government and my department in particular to have regular, continuous monitoring of how the work is going. That is how we will communicate, but local authorities are heading part of this and they are signing off the board.
As usual, I will have to talk about my interest as a councillor in Central Bedfordshire. Unfortunately, no one in Central Bedfordshire received the money so I do not have the interest that the noble Baroness has. I just wanted to understand the accountability and the structure. We are going to have community boards. Who will the money, and the decisions on it, lie with? Will it be the board or the council? Who will be the accountable body for the money? Who will determine who will be on that community board? Several noble Lords have mentioned democracy and who the representatives of the people are, so can the Minister please clarify that?
The relevant local authority will act as the accountable body for the funds, with the responsibility for ensuring that public funds are distributed fairly and effectively. A monitoring and evaluation strategy will be published in the summer. This will set out the framework for assurance and accountability expected from grant recipients, so watch this space.
(4 weeks, 2 days ago)
Grand CommitteeMy Lords, I declare that I have relevant interests in local government, as recorded in the register. I hope the Minister has understood every bit of what he has read out, because it is very complicated—that is not meant as anything more than a statement—particularly as there are no examples in front of us as to what the impact of the changes will be.
This statutory instrument needs to be understood in relation to the Non-Domestic Rating (Multipliers and Private Schools) Bill, which has just completed its Committee stage. That Bill, if enacted without amendments, will change the norms for business rates income, on which local government absolutely depends for a significant part of its income. The changed multipliers that the Bill envisages will, obviously, also alter the amount that different businesses will pay in non-domestic rates. This, in turn, will alter the income that different local authorities will receive as part of the 50% business rates retention scheme.
That impact will affect local authorities in very different ways. Local authorities with many properties that exceed the £500,000 rateable value boundary set in the Bill will gain in income. These businesses are primarily in major cities and include, for example, office blocks, hotels and major premises of that sort. Local authorities that are more reliant for income from retail, hospitality and leisure businesses will see their income in the 50% retained element decrease.
During the passage of the non-domestic rating Bill, I sought—and was granted—an assurance that local authorities will not be penalised as a result of the changes. However, that is on the national, global level. This statutory instrument is, I guess, the attempt to deal with these changes so that individual local authorities do not lose income or, conversely, gain too much income. The key question is whether that can be achieved in full. Is it possible under the new system that is going to come into effect in a year, whereby the Covid relief will gradually slip away and the new multipliers implemented will change the balance of income from businesses across the country? I have been assured that the national figure of income will not change. Will individual local authorities have assurance from the Minister that they will not lose out as a consequence of the changes? I accept that this is a very complicated set of calculations, so it would be absolutely fine if the Minister would prefer to write to me.
As the Minister will know, 43% of local authorities are on the verge of issuing 114 notices, so in this instance every penny will count. That is why I am asking the question. The lack of hard examples in the Explanatory Memorandum and the Minister’s introduction makes it really difficult to judge the implications of this instrument, so any further evidence will be extremely helpful for folk like me to understand what is going on.
My other point is about the changes to the 100% retention authorities; I want to know how that is worked out and I think it needs a bit more explanation. If those with 100% retention are no longer going to be able to retain 100%, how is it going to be worked out? Those authorities will expect to retain 100%. Again, I understand if the answer needs to be in writing, because this is not obviously easy or straightforward.
Finally, the issue that these changes bring to the fore is the current inability of councils to raise local income—be that in a small tourist tax, as the Manchester combined authority is now doing, or by any other means. A bit more flexibility for local authorities in raising their own small amounts of additional income would be of enormous benefit to many councils as they struggle to make ends meet. It would be worth knowing why flexibility in raising income does not seem to be in the Government’s agenda, because it would help to stem the enormous downward pressure on local public services. I look forward to what the Minister has to say, and a written response if needed.
My Lords, I mention my interests as a councillor in Central Bedfordshire. I thank the Minister for clearly outlining the essence of this SI. While these are technical adjustments that may sound reasonable on paper, it is useful to consider the wider impact of government actions in relation to the business rates system, particularly as it pertains to our small and medium-sized enterprises alongside larger businesses. As the noble Baroness, Lady Pinnock, mentioned, this is a very complex system, so when we make changes to it there tend to be unintended and uncertain changes. That is the whole reason we have this SI in the first place. I would like some assurance on that, which I will raise in a moment.
I turn to the regulations themselves. The primary change is to adjust how the levy and safety net payments are calculated for authorities that retain a greater share of business rates. The most notable change is ensuring that these authorities, sometimes referred to as 100% authorities, do not have to bear the brunt of additional payments that should, in fairness, be a central government responsibility.
(4 weeks, 2 days ago)
Grand CommitteeMy Lords, the Liberal Democrats wholeheartedly support this rise in planning fees, so I apologise now for repeating some of the very good points that the Minister made. She should not expect me to keep saying that for ever, but I do on this occasion.
We have all known for years that planning departments are underfunded; they are not covering their costs, and the position is simply unsustainable. I am interested that the Government have decided to go for an interim position rather than a full cost recovery. I can kind of understand their wanting it to be balanced, but I wonder whether the work has been done on what will be needed to get to that position, which we believe we should get to.
As the Minister said, planning departments have long been subsidised by the taxpayer through council tax; they have been bearing the burden of the costs of planning applications, which do not directly benefit them—particularly for individual householder applications. It seems completely illogical that everyone should contribute to an individual’s home improvements, which usually add value to just their property.
We welcome the change of emphasis from the last Government, who did at least increase the fees in December 2023—but I always felt that their agenda seemed to be to keep fees down. I note that a Conservative Member of Parliament in the other place described the rise as “eye-watering”. My riposte is that he clearly does not know what builders are charging these days, as the planning fee, which is an essential tool to getting the development right, is but a tiny fraction of the total cost. Two friends have recently had extensions to their homes, and when I hear how much they spent on the projects as a whole, I feel that £528 is probably the lowest in the grand scheme of their costs.
Major housebuilders are demonstrably making money, and their applications take the most time and expertise, so a rise to begin to cover costs seems entirely reasonable—more so given the financial challenges that local government faces. Some of the pre-app talks and site visits can be really extensive and time consuming.
If we have a concern regarding sustainability, it is about the recruitment and retention of planners. The ambition to recruit 300 new planners is laudable and welcome, and it seems churlish to point out the fact that it equates to just one planner per authority—but that is the reality. The Home Builders Federation pointed out, through a freedom of information request, that 80% of local planning authorities are operating below capacity.
The recruitment and retention problem is exacerbated by differential salaries. The best young graduates appear to be snapped up by the major housebuilders, as they can afford to pay significantly more than local authorities. Especially in areas of high house prices, that can make recruitment even more of a challenge.
The Minister will know that some local authorities are working together to look for solutions by co-operating rather than working against each other, competing for the same people and even poaching. Career opportunities can be better for an individual if they can work across several councils, especially with smaller districts.
The RTPI has pointed an important fact—that there is a lack of robust data on how many planning officers we have in each region and local planning area. Accurate data would help to pinpoint where resources and training are most needed, so perhaps the Minister could give us some more detail on the changes to the Pathways to Planning programme.
We think that all these increases are necessary and overdue, and accept that it is sensible to tie this to an annual increase. The fact that previous rises were not index-linked was part of the problem. The gap between the cost of processing an application and the fees charged has widened significantly over time.
There has been some talk of monitoring and ring-fencing of funds. Because of the parlous situation of local government funding, will local authorities rob Peter to pay Paul? In my experience, most councils will honour the intentions of government when money is handed out for specific needs, and we see no reason why that would not be the case here, without the need to mandate it or introduce checks. This Government are committed to decentralisation, so it is essential to let go and trust local authorities. Trying to micromanage budgets could be unnecessarily overbearing. We believe that councils should make all their own spending decisions. The Government already have mechanisms in place to monitor planning performance.
The Minister was right to point out that councils get no fees from the massive extension to permitted development rights, yet when there are problems with those conversions, the planners are drafted in to give advice and help to put things right. The key is that if there had been a need to obtain planning permission, the issues would have been sorted out right at the beginning. Will the forthcoming planning Bill be more helpful in this regard? We hope so, and in particular we look forward to allowing local planning authorities to set their own planning fees to meet their costs. A degree of flexibility to adjust to local circumstances and needs is essential.
My Lords, I reiterate my declaration of interest that I am a Central Bedfordshire councillor. These regulations propose important changes to the planning process, including substantial fee increases for householder applications, prior approvals and approval of details reserved by condition; and a new three-tier structure that will differentiate charges for householders, non-major developments and major developments. I thank the Minister for going through the instrument in some detail, and I will try not to repeat too often what she said.
Although His Majesty’s Opposition do not oppose these regulations in principle, we recognise that careful consideration is needed to ensure that these changes serve the interests of both home owners and developers.
The proposed increase in planning fees reflects the increasing demands on planning authorities and the need to recover costs, as the Minister mentioned. The fee for household applications will rise by 105% overall. We agree that these higher fees are necessary, as they ensure that planning authorities will have the resources to operate effectively. However, we must also be mindful of the impact on home owners, especially those who wish to make relatively modest improvements on their homes. We need to strike the right balance between cost recovery and affordability, ensuring that these fees do not place an undue burden on householders already facing financial pressures.
In addition to the householder fee increases, there are Section 73 increases, which, as outlined, will range from £86 for householders, £586 for non-major developments and £2,000 for major developments. This three-tiered structure is logical, and it is fair that the larger developments pay more, but we must ensure that the distinctions between the different types of development are clear, transparent and rational. We must also consider whether these fees inadvertently discourage smaller-scale developments or overburden individual home owners.
Finally, for biodiversity net gain approvals, there are increases of over 100%, from £145 to £298. What is the cumulative impact of all these fees? That is vital. What will they do for various developers, householders and so on? It is right that we get the right resources, but we also need to ensure that we do not overburden developers or small SMEs and enable them still to have financially viable projects.
The aim of these fees is to give resources to planning departments, so it is vital that they then deliver. Given the amount of frustration I get from householders, developers and so on about delays in the planning process and bureaucratic hold-ups, it is important that the fees result in faster, more efficient decision-making. We cannot just raise fees; we have to deliver faster, better planning processes.
I take this opportunity to note that, as mentioned earlier, the proposal to increase planning fees was originally a Conservative proposal—we did it in the previous Government—but I commit again that we need to fix the planning system so that stuff gets done in the allotted time. Timeliness and efficiency must accompany these fee increases.
Looking further ahead, I will touch on some of the proposals in the NPPF, which is really important. One reason we have delays in the planning process is that the planning system is complex, difficult and uncertain. The Government have made it clear that their intention is to simplify the planning process, and we welcome these efforts. We hope that they deliver a simplified planning system, but I also urge caution that simplification, while an important goal, should not come at the cost of clarity or integrity in the planning system. We need a process that is both simpler and more certain, and delivers quality developments so that businesses and individuals can have confidence in the decisions that affect their properties and developments.
In conclusion, while acknowledging the necessity of these fee increases and the proposed changes to the planning system, we urge the Government to ensure that the reforms strike the right balance. The Official Opposition are not opposed to reform, but we call on the Government to ensure that the planning system remains accessible and fair, particularly for smaller developers.
Moreover, as we look at these fee increases and the broader changes to the planning system, we encourage the Government to reflect on the need for a system that is not only more efficient but more responsive and certain. It is essential that the planning process delivers timely and effective decisions to business communities and home owners alike.
(1 month ago)
Lords ChamberMy Lords, as my noble friend Lord Young of Cookham said, when supply goes down and demand goes up, prices increase. What assessment have the Government made of reports that landlords are leaving the rental market at the highest rate ever? Many are citing rental reforms as their reason for leaving.
If I am honest with the noble Lord, I think the pressures on housing come from 14 years of not taking the housing market seriously. We have carefully assessed what the impact of the Renters’ Rights Bill might be, and we do not believe that it will have a significant impact on the supply of private rented housing in the market. Supply has been consistent for several years, and we want to maintain that and to make sure that the Renters’ Rights Bill delivers the right balance of support for both landlords and tenants. There are many really good landlords, and we want to give them the help and support they need through the Bill, as well as supporting our tenants.
(1 month ago)
Grand CommitteeI thank the noble Lord for making that point. He also talked about delays, which I will pick up in a later group when we talk about implementation; I have not forgotten about the important points he raises. On the point he just made, the Budget analysis takes into account the 2026 revaluation, so that point is covered by the Treasury in its work in the build-up to the Budget.
I did not quite understand that point. The Minister is saying that the revaluation has already been taken into account in the figures that the Treasury is coming forward with. Does that mean he can share the revaluation with us?
My Lords, let me clarify this for the noble Lord. As I said repeatedly on day one in Committee, the Treasury will publish an analysis when it sets its multipliers at the Budget, but the work that is going on in providing that analysis will consider all the issues, in particular the issue the noble Lord raised about the 2026 revaluation.
My Lords, Amendment 47 addresses the issue that, despite the Government’s claim that they would reform the business rates system, the Bill does not offer that. We heard concerns from several noble Lords on the previous day in Committee that this is not a Bill that will support the high street and level the playing field, as promised in the Labour manifesto. My concern is that businesses will face substantially higher costs. These proposals are supposed to support the high street, with a so-called Amazon tax, yet this is clearly not the case. It is a blunt instrument that will substantially increase taxes on all properties with a rateable value above £500,000. As such, it risks harming the very businesses it is purportedly designed to help, such as anchor stores and other retail, hospitality and leisure facilities fundamental to the high street.
There is a second concern that we have already raised: the cliff-edge nature of these proposals. I, like the noble Lord, Lord Fox, have done some very basic analysis of this. For example, a retail, hospitality or leisure business with a rateable value of just under £500,000 would today pay rates of around £175,000, assuming a 0.2 discount and a multiplier of 0.55, whereas if it were to make a small investment and tip over that threshold, it would pay £320,000. Like the noble Lord, Lord Fox, I allow for a little approximation in those numbers. There are plenty of examples of this. For instance, locally to me in Bedfordshire, Luton Hoo, which is currently looking at some investment, has a rateable value of £490,000. Will that investment go ahead, knowing the additional costs? Even more locally—as Members are aware, I am a councillor and I declare my interest as a councillor in Central Bedfordshire—near my own ward, a garden centre in Toddington faces the same issue. Again, I am aware that it is looking at some investments.
We have also touched on the impact of future revaluations. The Minister has been keen to point out that this will impact fewer than 1% of properties and only 3,100 retail outlets. He said that he wants to be clear and transparent, so can he tell us how many additional properties will be above the £500,000 threshold after the next revaluation? I note that the noble Lord, Lord Fox, refers specifically to the idea of a commercial landowner levy as a proposed tax reform to replace the business rates system. I support the sentiment of requiring government to consider genuine reform, rather than the lack of change that the Bill provides. I do not agree with the specific reform proposed by the noble Lord, but I acknowledge the need to adapt the system to ensure that online businesses that operate from out-of-town warehouses pay a fair, proportionate share of business rates. Given that the Bill has been brought forth, it seems reasonable to assume that the Government have delayed any plans they had to reform the system, which will damage businesses up and down the high street. They promised lower business rates but are reducing the relief offered to retail, hospitality and leisure businesses, sending an incoherent message to our high streets. I look forward to the Minister’s response.
My Lords, Amendment 47 seeks to require the Chancellor to undertake a review of the measures in the Bill, once passed, on broader non-domestic rating policy and to set out what potential changes may be required and/or what alternative approaches to non-domestic rating have been considered. The Government are committed to creating a fairer business rates system that protects the high street, supports investment and is fit for the 21st century. The Government commenced that journey at the 2024 Budget, when we announced our intention to permanently—I say that again: permanently—introduce lower rates for qualifying retail, hospitality and leisure properties from 2026-27, as well as a higher rate on properties with rateable value of £500,000 and above to ensure that the permanent tax cut is sustainably funded.
At the Budget, the Government also published the Transforming Business Rates discussion paper, setting out priority areas for business rates reform and inviting stakeholders to have a conversation with the Government on this matter over the course of this Parliament. The areas of interest for further reform as set out in the paper include: incentivising investment and growth, considering the frequency of revaluations and ensuring that the system is transformed to make it fit for the modern 21st century economy. The paper also focuses on tackling avoidance and evasion; for example, through the Government’s intention to publish a consultation on adopting a general anti-avoidance rule for business rates in England.
I am delighted to say that those conversations with stakeholders on priority areas for reform have commenced and are ongoing. I thank all those stakeholders who have been in contact to offer their valuable insights and experience of non-domestic rating. Furthermore, on 17 February, the Government published the Business Rates: Forward Look policy note, which provides an update on key milestones for the Government’s overall business rates reform agenda. As set out in that note, we are reflecting on engagement undertaken so far and the views expressed as part of that process. It also sets out that we anticipate further stakeholder engagement on specific reform options ahead of the Autumn Budget, when final decisions will be set out.
I am aware that there is support from Liberal Democrat noble Lords and Members of Parliament for the replacement of business rates with a commercial landowner levy. What is important to the Government is that we have a tax that works. It is not the first time that this House has heard suggestions for a tax on land values or a levy on landowners: it was as common a debate in the last century as in this one. What all those debates show is great uncertainty and a lack of evidence of the benefits: any benefits to the high street would be far from certain. We are clear on the need for reform but, to minimise disruption for businesses, the Government will make improvements to the existing system over the course of this Parliament.
Before I conclude, let me address the points that the noble Lords, Lord Fox and Lord Jamieson, raised on investment. They will understand that I am unable to comment on specific examples of live non-domestic rating bills but, as part of the Transforming Business Rates discussion paper, we will look at the effectiveness of the improvement relief scheme, which helps businesses that invest in their property. I look forward to our engagement, post Committee, in more detailed conversations. For the reasons set out, I am unable to accept the amendment. I agree that the system is broken and we are trying to fix it. It cannot go on year after year on an ad hoc basis. We need certainty and sustainability so that people can have a clear and fair system. As we said in our manifesto, we will continue to support leisure, hospitality and retail, and those above £500,000 rateable value—fewer than 1% of properties—will contribute to make sure that our system is fair and balanced.
I hope I have provided reassurance as to the seriousness with which the Government are approaching our stated task of reforming the business rates system, and I ask the noble Lord to withdraw the amendment.