Levelling-up and Regeneration Bill

Debate between Lord Kennedy of Southwark and Baroness Bloomfield of Hinton Waldrist

Committee stage
Wednesday 24th May 2023 Grand Committee

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, Amendment 498 in the name of the noble Baroness, Lady Taylor of Stevenage, seeks for the Government to publish a social mobility strategy. The issues raised in this debate are all indeed important and vital if we are to deliver social justice. However, they provided the rationale for the levelling up project itself, and the levelling up White Paper provides a clear plan to level up every corner of the UK, underpinned by 12 ambitious missions over 10 years and tracked by an annual report.

I also reassure noble Lords that the Office for Students has launched the equality of opportunity risk register, which will set national priorities for tackling inequalities in higher education, including geographical inequalities. It was heartening to see the recent climb up the international league tables for literacy rates in younger children in the UK, which is a hugely encouraging sign.

We are committed to ensuring that more people from disadvantaged backgrounds enter apprenticeships—a great driver of social mobility—and we are increasing the apprenticeships care leavers’ bursary to £3,000 from this August. We are also providing additional funding to support social mobility generally in apprenticeships, which includes £1,000 payments to employers and training providers who take on apprentices aged under 19 or apprentices with a learning difficulty or disability, as well as a £1,000 bursary payment to apprentices who were previously in care, as mentioned.

The Government are also investing over £18.8 million in 2023-24 to support the rollout of a network of careers hubs across the country, to help drive improvements in careers education. Schools and colleges in the most disadvantaged quartile are reporting the strongest progress.

Numerous measures in the LURB will improve outcomes and reflect better the interests of rural communities across the country. Rural communities will benefit from opportunities for increased democracy, measures designed to improve housing affordability, and improved infrastructure. The new infrastructure levy will be designed to deliver as much, if not more, affordable housing.

That really related to the next amendment, Amendment 499, in the name of the noble Baroness, Lady Hayman of Ullock. The framework set out in the Bill provides ample opportunity to scrutinise the substance of the missions against a range of government policies, including levelling up in rural areas.

As the noble Lord, Lord Foster, outlined so passionately, we know that some cost pressures, including transport and energy, can be even greater in rural areas than in urban areas. That is why the Government have, for example, offered rural energy support through alternative fuel payments and extended the subsidy scheme for buses to protect vital bus routes, helping with the cost of living and enabling people to get to where they need to affordably and conveniently. The recovery grant scheme comes in addition to government investment of £3 billion promised for bus services by 2025.

The Government are already committed to delivering an annual report on rural proofing. The White Paper trailed the publication of the second annual report, Delivering for Rural England, which was published in September 2022. It set out specific considerations for levelling up in rural areas and how government departments seek to address these through targeted approaches, where needed, as well as broader measures to strengthen the rural economy, develop rural infrastructure, deliver rural services and ensure good management of the natural environment. It also announced the launch of the £110 million rural England prosperity fund so that local authorities can support rural businesses and community infrastructure.

Amendment 504GC, in the name of the noble Baroness, Lady Blower, considers the extremely important issue of adult literacy. I should declare that I have a very personal interest in this whole area, having taught literacy in Huntercombe young offender institution for a while. The levelling up skills mission sets out an ambition for 200,000 more people to complete high-quality skills training in England each year by 2030. As part of this, we are fully funding study for adults in England who do not have essential literacy up to level 2. We have a strategy. Approximately 60% of the adult education budget is devolved to nine mayoral combined authorities and delegated to the Mayor of London, acting through the Greater London Authority. These authorities are responsible for the allocation of the adult education budget in their local areas and are best placed to understand local needs.

In the light of these efforts and commitments, I hope that the noble Baroness, Lady Taylor of Stevenage, is reassured and that her noble friend feels able to withdraw the amendment.

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

My Lords, I thank the Minister for that response. However, while listening to the response, it was easy to think, “Well, everything’s great, isn’t it? Nothing is going wrong; there are no problems”, when in fact the house is on fire. Everybody can buy into levelling up, but you then have to actually do some levelling up. It is very frustrating—we cannot equip people with the skills they need to read, to write, to get the job, to make their lives better. It frustrates me that what the Minister said suggests that there is not really a problem here and it will all be fine. We have to invest in people. That is so much of what is wrong here.

We mentioned transport services. If you cannot get on the bus to get the job, you will not get the job. I know that I am a Londoner and sound like one, but I did live in the Midlands for 20 years—in rural Leicestershire, in rural Nottinghamshire, in Nottingham and in Coventry—so I know a bit about living outside London. If you cannot connect areas of deprivation with areas of prosperity, you will not make any progress.

What worries me is that levelling up will go like the big society—do we remember that one? It disappeared after a couple of years; it was quietly pushed away. It was the big thing and all over the Tory manifesto in 2010, then it just vanished without a trace. After about two years there was never any mention of it, except by the Opposition. I worry that this Bill will become an Act but, when we look back in three, four or five years’ time, we will ask how much has really been enacted. After lots of consultation and lots of discussion, how much will have been enacted and how many regulations will have been laid?

I will leave it there and withdraw the amendment. This is such a big area that has cross-party support. We need to see more action, and things are not quite as rosy as the Minister said.

Leaseholders: Service Charges

Debate between Lord Kennedy of Southwark and Baroness Bloomfield of Hinton Waldrist

Wednesday 20th July 2022 Lords Chamber

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

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interest as a leaseholder.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, by law, service charges must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard. Leaseholders may make an application to the appropriate tribunal to challenge the reasonableness of their service charges. We are committed better to protect and empower leaseholders by giving them more information on what their costs pay for. This will help them to challenge their landlords more effectively if they consider their fees unreasonable.

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

My Lords, leaseholders are seriously disadvantaged in disputes with freeholders and management service companies about the service charges, ground rent or any other aspect of their tenure. The present arrangements are not fit for purpose. When will the Government take action on this matter?

[Baroness Bloomfield of Hinton Waldrist (Con)]

The Government do indeed recognise that the existing statutory requirements do not go far enough to enable leaseholders to identify and challenge unfair costs. The Government have said that they will take forward further legislation on leaseholds in the next Session.

Housing for Older People

Debate between Lord Kennedy of Southwark and Baroness Bloomfield of Hinton Waldrist

Tuesday 15th March 2022 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

As I said, the Government will be looking at all ways of making sure that we have an appropriate housing stock for older people, ranging from supporting people in their own homes to giving them the opportunity of going to live in supported villages with on-site care. I agree that it may not be ideal to be in a high-rise block, but it has to be a matter of choice for the individual.

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

My Lords, will the noble Baroness join me in paying tribute to the almshouse movement and the fantastic work it does on accommodation for older people? I refer the House to my interests in the register. Will she agree to come along to visit the United St Saviour’s almshouses that have been built on Southwark Park Road, of which I am very proud to be a trustee? These are fantastic, 21st-century homes for older people, freeing up council homes that can be let to families.

Small Business, Enterprise and Employment Act 2015 and Pubs Code etc. (Amendment) Regulations 2021

Debate between Lord Kennedy of Southwark and Baroness Bloomfield of Hinton Waldrist

Wednesday 9th March 2022 Grand Committee

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I beg to move that the Small Business, Enterprise and Employment Act 2015 and Pubs Code etc. (Amendment) Regulations, which were laid before the House on 30 November 2021, be approved.

The Pubs Code was introduced in 2016 to ensure the fair and lawful treatment of tied pub tenants of large pub-owning businesses. These regulations would improve its practical operation. A tied pub tenancy is where the tenant has agreed to purchase beer and other stock from their pub-owning landlord in return for a lower rent and other benefits. That agreement means that the tied pub tenant is unable to negotiate deals in the open market for beer and other products, but also means that their landlord has a shared interest in the success of the pub and works in partnership with the tied tenant. This has not worked well in all cases, and evidence from tenants to several Select Committees identified failures in the tied pubs sector and led the Government to introduce the Pubs Code to regulate this relationship. The Pubs Code creates certain rights and protections for tied tenants, including better information prior to signing a contract; no upward-rent-only reviews; no tied gaming machines; a right, at certain points, to break their tied arrangement and opt for a free-of-tie tenancy, by way of the market-rent-only process; and a system of redress through the Pubs Code Adjudicator.

The tied model is not inherently bad. In many cases, if not most, tenants are positive about their tied arrangements and welcome the partnership with the pub-owning business. It is therefore crucial that the Pubs Code strikes the right balance between creating rights and protections for the tied tenant, the property rights of pub-owning businesses and their ability to realise the value of their investments. To ensure the Pubs Code continues to operate as intended, a statutory review must be conducted every three years. The first such review concluded with the publication of the Government’s report in November 2020. This found that although there had been improvements, there were some aspects of the code’s practical operation that could be improved. Following a public consultation, the Government committed to make several changes to the Pubs Code.

The most significant changes in these amendments are the improvements to how the process for the market-rent-only option works in practice. The MRO process enables the tied tenant to request a proposal from their pub-owning business that sets out the terms for a free-of-tie tenancy where the tenant would pay a market rent. That rent will likely be higher with the removal of the contractual agreement to purchase tied products from the landlord and is a matter for the parties to negotiate.

The SI will improve the MRO process, first by requiring the initial MRO proposal from the pub-owning business to include a rent proposal, so that parties can negotiate both terms and rent at the same time. Secondly, it will create a single resolution period of up to three months. Unlike the current process, where the tenant has 14 days to decide whether to refer an MRO proposal to the PCA, the parties will have time to negotiate the proposed free-of-tie terms and rent. This change has been welcomed by most stakeholders, including the PCA. Only the tenant can end this period early, at any time after 21 days, enabling them to refer the proposed terms to the PCA, or the proposed rent to an independent assessor.

Finally, the SI makes other changes, adjustments and clarifications to the MRO process, reflecting the introduction of the resolution period. For instance, where there is a procedural defect in the MRO proposal, such as the omission of the rent offer, the tenant has 14 days to refer this to the PCA to resolve such technicalities more quickly. It also provides expressly for rereferral to the PCA where the tenant considers that the pub-owning business’s revised response is still not MRO-compliant.

Schedule 1 to the statutory instrument uses powers in the Small Business, Enterprise and Employment Act 2015 to amend the qualification period for a business owning tied pubs to come into or out of scope of the Pubs Code. This amends the requirement from having owned 500 or more tied pubs for six months in the previous financial year to three months. No new pub-owning business has met this threshold since 2016, but noble Lords will be aware of the merger and acquisition activity that is a feature of the pub sector.

Currently, tied tenants could wait for nearly 18 months after their landlord reaches the 500 tied-pub threshold before acquiring the rights and protections of the code. For example, under the legislation as it stands, a pub company meeting this 500 tied-pub threshold through tied pub acquisitions in October 2022 would not come under the code until April 2024. Under the amendment, the maximum period is reduced to 15 months, so a pub company meeting that 500-pub threshold in October 2022 would come under the code in April 2023. Similarly, a pub-owning business reducing its number of tied pubs to below 500 would remain regulated for a longer period, but this also means that the minimum period of full protection for the remaining tied tenants increases from six to nine months and would help to manage such changes, which are beyond the tenant’s control.

In Schedule 2, the comparison period, used to determine whether a significant price increase for a tied product or tied service has occurred, is amended from 56 weeks to 52 weeks. This is one of the events allowing a tied tenant to request an MRO proposal, and therefore serves to disincentivise significant price increases for tied beer, et cetera, under the tie.

The Government are cautious about changing this arrangement, but there is a case for amending how the comparison period is calculated. A 56-week comparison period could capture two annual price increases, raising complications for the more traditional 12-month business planning cycle. The proposed change amends the comparison period to 52 weeks but continues to disincentivise price increases, thereby protecting tied tenants.

Lastly, I move to notification of the PCA regarding extended protection, which applies where a tied pub is transferred to a landlord not regulated under the code. Tenants with extended protection continue to benefit from many of the code’s provisions for a limited time, including access to the PCA. Currently, the PCA will have no direct knowledge of such transfers. This amendment will require a regulated pub-owning business, before the transfer, to inform the PCA when it is transferring a tied pub where the tenant will enjoy extended protection. This enables the PCA to contact new owners, raising awareness of their tied tenants’ rights and protections.

In conclusion, this SI makes important changes to improve the practical operation of the Pubs Code, most notably in creating a longer period to enable the tied tenant to negotiate a free-of-tie tenancy or, indeed, a better tied deal. I commend these regulations to the Committee.

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

My Lords, I should make it clear at the start how much I like a pub. I have spent my adult life visiting pubs all over the country and am a big supporter of them. I see them as the heart of the community and as a very British thing. We are very well served. Having said that, we all know about how many pubs are struggling and are closing. During the pandemic, I think that 40 pubs a week were going bust. That is something that we should all regret. Even outside the pandemic, I think that we have all known for years that many pubs have struggled. Publicans, those who are tied to a company and those who are not, have to work very hard to have an offering that actually serves their community. We will all know of very different pubs that know their customers well. Good pubs know what their customers want and serve them well.

The code itself is a good thing, but in practice it has not always worked to the benefit of the tied tenant. It is a bit like a David and Goliath battle, in that even when individual tied tenants seem to get changes, they are still tied into the agreement they have. I think sometimes it is very difficult for them. Yes, the tie means that they get a cheaper rent, but they are then tied into buying the beer and other things to sell often at a slightly higher price. If they want to change to a market rent, getting out of that can take a long time. There is not really speed here. Yes, the changes make some progress, but I think that, generally speaking, the adjudicator and the process have not particularly served the landlords of tenanted pubs particularly well. I still think that, even with these changes, tied tenants are getting a bit of a raw deal in some respects. We need to do much more, otherwise it will always be the tenant who has to wait to make the change and to pay. All those things go further to ensure that we lose more and more pubs.

What I would like to hear from the Minister when she responds is what further is going to be done. If anything I am saying today has any resonance with her, what are we going to do then to ensure that we will not be sitting here in years to come with more and more pubs lost, or saying that we are going to make further changes to the code? As it is now, it is not going to be good enough and we are going to see more pubs lost.

Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2022

Debate between Lord Kennedy of Southwark and Baroness Bloomfield of Hinton Waldrist

Wednesday 9th March 2022 Grand Committee

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I beg to move that the draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2022, which was laid before the House on 9 March 2022, be approved.

The UK Emissions Trading Scheme, or UK ETS, was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme to encourage cost-effective emissions reductions which will contribute to the UK’s emissions reduction targets and net-zero goal. This scheme replaced the UK’s participation in the EU Emissions Trading Scheme, and the 2020 order applied EU ETS rules on the monitoring, reporting and verification of emissions, with modifications to ensure that they work for the UK ETS.

The 2020 order was subsequently amended by the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 to include provisions for the free allocation of emissions allowances and to create the UK ETS registry. Regulations under the Finance Act 2020 established the rules for auctioning allowances and mechanisms to support market stability. The UK ETS launched on 1 January 2021 and the first auction successfully completed on 19 May. The scheme has been running well since this launch, but there is a need to continue to improve its operation.

Further amendments to the scheme were made by the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2021, which was subject to the negative procedure and came into force on 7 February 2022. In broad terms, the 2021 order made various technical and operational amendments to the UK ETS across a number of scheme aspects, including providing for installations in the hospital and small emitter opt-out scheme to be able to increase their emissions targets and for installations in both opt-out schemes that return to the main scheme to benefit from free allocation.

The purpose of this order is to amend the 2020 order to address several residual operational issues identified in the development of and legislation on the scheme, and to support the scheme’s technical operation. This legislation also addresses an issue of doubtful vires relating to the previous amendments raised by the Joint Committee on Statutory Instruments.

This proposed order consists of various operational issues that were identified by BEIS, the devolved Administrations and the national scheme regulators during the establishment of the scheme but were required to be legislated for via an affirmative procedure. In particular, this order introduces a civil penalty to enforce an existing obligation to return overallocated allowances; creates an offence of intentionally obstructing the scheme regulators exercising enforcement powers; makes it clear that some enforcement powers previously introduced by the negative procedure are valid; and provides that, when an installation’s permit is surrendered or revoked, the notice given to the operator will include a requirement to surrender any deficit of allowances from previous scheme years.

The Government consulted on the policy in these regulations between July and September 2021. The consultation generated seven responses from a range of stakeholders. Responses were largely considered clarification-based, none of which impacted on the proposed policy changes. Alongside the consultation, the UK Government and the devolved Administrations jointly sought the advice of the Committee on Climate Change on the public consultation. The Committee on Climate Change reviewed the consultation on the proposed amendments and had no comments on the content.

The amendments made to the surrender and revocation notice provisions were not included in the public consultation. The department took the view that the policy represented by these amendments is within the scope of the consultation previously carried out on the future of UK carbon pricing in 2019 and is covered by the Government’s response to that consultation, which was published in June 2020. The scheme regulators were consulted and agreed with the proposed amendments. The Committee on Climate Change was advised of the additional provisions and had no comments.

The overall level of climate ambition in the UK ETS is unchanged by the proposals. There is no overall impact on the monetised costs and benefits to businesses. There is no change to the supply of allowances or the expected emissions from participants. There is also no expected change to the general administrative burden for emitters. In terms of other impacts, these provisions are also designed to address a number of specific circumstances for regulators and the registry administrator, including options to apply penalties specifically if operators or aircraft operators fail to return allowances. Again, these are not expected to apply generally, but might take effect in specific circumstances.

In conclusion, this order will help to improve the effective operation of the UK ETS. This in turn will help to ensure that the scheme plays its part in reducing emissions. I commend the draft order to the Committee.

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

My Lords, I do not intend to speak for long. This order is fairly uncontroversial, so I do not want to detain this packed Committee. The one thing that I want to mention is that the Minister mentioned consultation and said that only seven people responded. I have stood here many times and looked at consultations, and it always strikes me how woefully few the responses are. This order may not cover very much, but it seems to me that we have to consult. The Minister need not come back but, if only seven people respond, have we got the consultation right? That is a general comment across a number of departments. I shall not detain the Committee, because I do not have a huge objection; the order is fairly uncontroversial. However, I understand that this order amends a previous order, so the question is why we did not get it right in the first place. Perhaps the Minister can respond on that point in particular and about consultation. I will leave it there.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Lord for his kind comments and his contribution to this debate. I take his points about the consultation. I wondered why we had had so few responses, but it is a general point about consultations.

The UK ETS was designed by the UK Government jointly with the Scottish Government, the Welsh Government and the Northern Ireland Executive. It came into force on 1 January 2021, only 15 months ago, replacing the UK’s participation in the EU scheme. The UK Government and devolved Administrations are committed to the use of carbon pricing as a key policy lever to ensure that the UK reaches its ambitious climate targets, including net-zero emissions by 2050, cost effectively. We will in due course also consult on aligning the UK ETS cap with our ambitious net-zero target—and I am sure the officials behind me will take note of the consultation procedures for that. The UK ETS will promote cost-effective decarbonisation, allowing businesses to cut carbon where it is cheapest to do so. It will help mobilise the scale of capital investment necessary to deploy clean energy technologies and to capture new trade opportunities on the back of the energy transition. Alongside our UK ETS, we are also supporting and incentivising business to invest in key technologies such as hydrogen and carbon capture, which, as the noble Lord will know, is also supported by the Government.

Housing: Unfair Leasehold Agreements

Debate between Lord Kennedy of Southwark and Baroness Bloomfield of Hinton Waldrist

Tuesday 3rd March 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, we welcome the CMA’s report on its investigation into unfair terms and mis-selling in the leasehold market, and I commend on his work my noble friend Lord Tyrie, who led this report. The report underlines the problems caused by onerous ground rents. We have been clear that leaseholders should not pay a charge for which they have received no tangible benefit in return. That is why we have committed to legislating to reduce ground rents to zero for future leases and to banning the sale of new leasehold houses. We are pleased that the CMA is seeking to take forward enforcement cases, following the findings of its investigation.

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

Does the Minister agree that the actions of some freeholders, property developers and service companies are scandalous? Leaseholders are ripped off with ever-escalating ground rents, service charges, commission fees and, frankly, dodgy sales practices, which effectively make home owners tenants in their own homes. Can she go further and commit that the Government will take immediate, firm action on these practices and stand up for leaseholders? Urgent action is needed now.

[Baroness Bloomfield of Hinton Waldrist]

The noble Lord is correct. These unfair practices in the leasehold market have absolutely no place in a modern housing market, and neither do excessive ground rents that exploit consumers who get nothing in return. That is why we are reforming the system so that it is fairer for leaseholders. In December 2019, we announced that we would move forward with legislation on leaseholder reform, reaffirming our commitment to making the system fairer for leaseholders. This will include measures to ban the sale of new leasehold houses, restrict ground rents to peppercorn for future leases, give freehold home owners equivalent rights to challenge unfair charges, and close loopholes to prevent unfair evictions. Regarding his question on what action we can take, the CMA has already announced enforcement action and said that this report is an interim report and that its research is ongoing.