Class 4 National Insurance Contributions
Lord McKenzie of Luton Excerpts(7 years, 8 months ago)
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Lord Young of Cookham
The settlement for the current year has been made and the additional funding that was announced in the Budget will stand, so all the commitments that have been made in the Budget will remain.
Lord McKenzie of Luton (Lab)
My Lords, there is an air of inevitability about this decision today. We have seen it built on the folly of those manifesto commitments referred to by the noble Lord, Lord Higgins. There is another issue that has run through lots of Budgets, which is the internal process of government and the checks and balances that are applied to Budgets, which are much weaker than one would see in most legislation. Anyone producing a Bill in government has to go round every department getting input into it, and there is challenge. That process irons out some of the problems that we have seen emerge not only in this Budget but, to be fair, in previous Budgets and announcements as well. On the specific commitment today about no changes to class 4 contributions, does that apply to the basis of calculation of thresholds as well as the rates?
Lord Young of Cookham
That is a good question. The manifesto commitment was actually about the rates. So far as the thresholds are concerned, our policy has been to uprate them each year in line with CPI, I think. We have no plans to change that.
Civil Society and Lobbying
Lord McKenzie of Luton Excerpts(8 years, 2 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, I too congratulate my noble friend Lady Hayter on securing this important debate and for the clarity and conviction with which it was introduced. It is wide-ranging in its scope but, like others, I propose to speak in support of the role that charities can play in a democracy, and explain how they can reach the parts which government sometimes cannot. I do this by sharing the story of one particular charity, NOAH Enterprise—New Opportunities And Horizons—of which I am privileged to be a trustee, as recorded in the register of interests.
I offer the description of its activities as evidence of the need to promote the importance of charities’ campaigning as well as their role in service delivery at the sharp end. I join those who argue for the rejection of barriers that place restrictions on charities, preventing them imparting their experience and pressing policy and funding issues on government, central or local, if for no other reason than that it would otherwise be a tragic waste of their experience and learning, often gained in the most difficult circumstances. It would be letting down the very people who these charities exist to serve.
NOAH is a charity that, out of Christian conviction, seeks to support the most disadvantaged members of the local community, particularly those who are homeless or at risk of homelessness, who struggle with drug and alcohol abuse or sleep rough, who have fallen into poverty, or who are otherwise marginalised and socially excluded. It endeavours to do this in a number of ways, but fundamentally by a holistic offering of services. It offers street outreach, persuading people to engage with the services on offer, including welfare—essentially food, clothing and personal hygiene—access to a GP surgery, mobile dentistry and a mental health clinic. It will seek accommodation for its clients and give advice on budgeting. It will further provide basic training in life and vocational skills and can provide work experience. Part of this activity is funded from a social enterprise involving furniture restoration, as well as from traditional charity shops. This enables work experience to be offered in such ways as warehousing, drivers’ assistance, woodworking, administration and retailing.
To give all this some context, in the year to 31 March 2016 there were 486 accepted referrals of people who needed help of one sort or another, while 22,000 distinct outreach visits were made and 6,426 breakfasts were served as well as some 17,000 lunches. There were also 484 people enrolled on courses at the new NOAH Academy, with 71 reaching employment. Moreover, it can claim numerous active partnerships with a range of statutory and third sector agencies, churches and community groups. It has also had the benefit of volunteers—around 300 a month at the current level—who support the operations in a variety of ways. This might be in furniture recycling, cooking for the day centre or working to provide food in the evening.
For NOAH, this level of support is vital to its continued existence. The motivation for the volunteers might be varied but many undoubtedly develop an understanding of the challenges of the most disadvantaged, which encourages them to give a voice to those without one. Many become unofficial champions of NOAH, spreading the word and building the support network—campaigning about what NOAH does and what needs to change. In a sense, they are like the “Games Makers”: for them, it is a chance to matter. NOAH has also been the recipient of the CSR efforts of a number of corporates, large and small, to the mutual benefit of all. This has been a two-way process whereby a few corporates have taken work placements.
The focus of NOAH is to assist and support the poorest on a journey out of destitution and towards a sustainable future. As the NCVO says, it addresses the causes of social problems and not just their effects. Its approach is to provide a pathway from living on the street to temporary accommodation and daycare, through to settled accommodation, training, work experience and preparation for employment—and then into employment. This pathway can be joined at any point. For individuals on that journey, there is the benefit of its components being delivered under the one trusted umbrella of NOAH, much of it delivered on behalf of the state but not by the state.
As with many charities, the era of austerity has meant pressure on its finances, particularly from statutory sources and at a time when needs are greatest. However, its income sources last year included grants from statutory bodies for programmes such as Single Persons Homeless, the street drinkers project and Jobcentre Plus. Continuity remains a difficulty. Thirty-one foreign nationals were repatriated at their request last year, through a fund financed by Luton Borough Council. It also continues to get support from the Irish Government under their Emigrant Support Programme, which has been commendably sustained despite the recent recession.
Although there are, reasonably, always grant conditions, so far as I am aware nothing has yet emerged which prevents the charity raising public awareness and campaigning, particularly on poverty and homelessness. NOAH’s second annual conference took place in February with the theme of working together to address poverty in Bedfordshire. It was focused on statutory and third sector decision-makers in the county.
If I had to summarise NOAH’s benefits as an example of what a locally based charity can deliver and why it should be encouraged, I would list that it is driven by a clear and consistent vision; that it might be buffeted from time to time by the policy and funding swings of the statutory sector, and may have to adapt sometimes, but its focus is clear; that it can join things up in a manner which we know that government, local and national, finds difficult; that it is anchored in the community through its many partnerships and participation in local life, and through its proactive and articulate chief executive; and that it has the capacity to build trust among its service users and the wider community. It can reach the most excluded in our community, to offer hope, and seeks to recognise the fundamental dignity and worth of every individual.
Bank of England and Financial Services Bill [HL]
Lord McKenzie of Luton Excerpts(8 years, 6 months ago)
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Baroness Kramer
My Lords, I echo the objections just raised by the noble Baroness, Lady Drake. It is quite inexplicable that “retrospective” does not mean that the new regime will be recalculated from the date that people were able to access their pension pots. It seems equally unfair for people to have paid an inappropriate exit fee a year ago as it is for them to pay an inappropriate exit fee a year from now. Has the Minister considered how this will tend to inhibit decision-making by families until the new regulations are revealed? Instead of making the best decision for the family, there will be great pressure to delay that decision until the rules are clearer and, presumably, the exit fees are removed.
The amount of money involved in this process cannot be substantial but to the individual family that has been impacted, it is certainly significant. I really do not understand the Government’s thinking on this issue.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for his early warning of this amendment, for facilitating the meeting with officials and for addressing at that meeting some of the incisive and expert questions posed by my noble friend Lady Drake. As we have heard, the new clause places a requirement on the FCA to make rules to prohibit or cap certain early exit charges in regulated schemes which act as a deterrent to people accessing their pensions under the new pension freedoms. So far as it goes, this should be supported.
As the Minister’s letter of 16 March sets out,
“after the reforms took effect last April, it has become increasingly clear that early exit charges were preventing some people from accessing their pension flexibly under the freedoms”.
This was substantiated by the government consultation and evidence-gathering by the FCA and the Pensions Regulator. This process identified a number of weaknesses in the application of the freedoms policy: not just the early exit charges but a lack of clarity in the process for transferring pension savings and uncertainty around the need for financial advice when making transfers involving safeguarded benefits.
Although early exit charges are not an issue for the majority of those eligible to access freedoms, the Government have concluded that significant numbers of eligible individuals face charges which in absolute or relative terms present a “real barrier” to early access. This begs the obvious question of why this matter was not addressed as a fundamental component of the design of pensions flexibility in the first place. Why has it seemingly come as such a surprise to the Government that these early exit charges exist and could act as a deterrent? This is symptomatic of the rushed nature of the introduction of this policy more generally, which lacked the consultation and consensus-building that have typically characterised good pensions policy development.
It might be argued that before the introduction of the FCA cap—to be in place before the end of March 2017, as we have heard—there has been no detriment because by definition exit fees could not have been a deterrent to the 400,000 times that pension pots have been accessed to date. But it seems that exit fees could be a deterrent, making it less likely, weighed against other factors, that someone would access their pension pot, without these fees being an absolute bar. That is why, as my noble friend has argued, we consider that any capping should be applied not only to existing as well as new contracts but to pensions accessed from the start of the pension freedoms regime in 2015, a point supported by the noble Baroness, Lady Kramer.
Housing and Planning Bill
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“Development corporations: objects and general powers
(1) Section 136 of the Local Government, Planning and Land Act 1980 (objects and general powers) is amended as follows.(2) After subsection (2) insert—“(2A) Corporations under this Act must contribute to the long-term sustainable development and place making of the new community.(2B) Under this Act sustainable development and place making means managing the use, development and protection of land and natural resources in a way which enables people and communities to provide for their legitimate social, economic and cultural wellbeing while sustaining the potential of future generations to meet their own needs.(2C) In achieving sustainable development and place making, development corporations should—(a) positively identify suitable land for development in line with the economic, social and environmental objectives so as to improve the quality of life, wellbeing and health of people and the community;(b) contribute to the sustainable economic development of the community;(c) contribute to the vibrant cultural and artistic development of the community;(d) protect and enhance the natural and historic environment;(e) contribute to mitigation and adaptation to climate change in line with the objectives of the Climate Change Act 2008;(f) positively promote high quality and inclusive design;(g) ensure that decision-making is open, transparent, participative and accountable; and(h) ensure that assets are managed for long-term interest of the community.”(3) Section 4 of the New Towns Act 1981 (the objects and general powers of development corporations) is amended as follows.(4) For subsection (1) substitute—“(1) The objects of a development corporation established for the purpose of a new town or garden city shall be to secure the physical laying out of infrastructure and the long-term sustainable development and place making of the new community. (1A) Under this Act sustainable development and place making means managing the use, development and protection of land and natural resources in a way which enables people and communities to provide for their legitimate social, economic and cultural wellbeing while sustaining the potential of future generations to meet their own needs.(1B) In achieving sustainable development, development corporations should—(a) positively identify suitable land for development in line with the economic, social and environmental objectives so as to improve the quality of life, wellbeing and health of people and the community;(b) contribute to the sustainable economic development of the community;(c) contribute to the vibrant cultural and artistic development of the community;(d) protect and enhance the natural and historic environment;(e) contribute to mitigation and adaptation to climate change in line with the objectives of the Climate Change Act 2008;(f) positively promote high quality and inclusive design;(g) ensure that decision-making is open, transparent, participative and accountable; and(h) ensure that assets are managed for long-term interest of the community.””
Lord McKenzie of Luton
My Lords, I rise to speak briefly—that was the plan—to Amendment 103, tabled by my noble friends Lord Kennedy and Lord Beecham. In many ways, it picks up on a debate that we had yesterday. The amendment inserts place-making objectives for both urban development corporations in the Local Government, Planning and Land Act 1980 and for new town development corporations in the New Towns Act. It was prompted by the situation in which we find ourselves—a country with a major housing crisis—looking back to those times when it was recognised that we needed to build on a large scale if we were going to make inroads into the housing crisis. That took us back to the era of new towns. The realisation that this needs to be done is encouraging many to look back at that programme, through which Britain built 32 new towns and today provides homes for more than 2.5 million people. The creation of those new towns was made possible because of legislation that is still on the statute book today, but that does not mean it does not need to be updated. The purpose of our amendment is to ensure that the objectives of this are firmly linked to the long-term sustainability, development and place-making of the new communities. Under these amendments,
“sustainable development and place making means managing the use, development and protection of land and natural resources in a way which enables people and communities to provide for their legitimate social, economic and cultural wellbeing while sustaining the potential of future generations to meet their own needs”.
The amendment addresses both the Local Government, Planning and Land Act 1980 and the New Towns Act 1981. I shall not spend time going further into the detail of that as it is set down clearly in the amendment.
I note that there are two further amendments in this group, which have not yet been spoken to, about the need for proper consultation. That is also a reflection of the more modern era, and we support them. I beg to move.
Baroness Evans of Bowes Park
My Lords, the amendments are indeed very timely. On Amendment 103, I say at the outset that I wholeheartedly endorse the importance of creating sustainable, well-designed places and I agree that, as the Budget announcement makes clear, statutory delivery vehicles can have an important role to play in achieving that. However, I echo what my honourable friend from the other place said: I am wary of creating new definitions and prescribing a long list of objectives for new town development corporations and urban development corporations, however worthy those objectives are in principle.
The NPPF already provides a clear view of what sustainable development means in practice, and to a very large extent it incorporates the objectives set out in the amendment. However, I accept that there is a case for change, and I am happy to look further at the objectives of the new town development corporations and how they could be extended, with a view to introducing an amendment that reflects this debate on Report. I hope that in light of this undertaking the noble Lord, Lord McKenzie, on behalf of his colleagues, will withdraw his amendment.
I am grateful to the noble Lords, Lord Best and Lord Taylor, for Amendments 103A and 103B. The Government are committed to updating the New Towns Act 1981 so that we can better support local areas that want to bring forward new garden towns and villages. I emphasise that our focus is on locally led new garden towns and villages, and we will back proposals that have been developed locally with local support. We will absolutely not impose new towns and villages on communities.
The amendments set out one of the key changes that need to be made to the New Towns Act 1981, which is sound in its fundamentals but is showing its age. I am supportive of a modernised process that is consistent across both types of delivery vehicle, and therefore ask noble Lords not to move these amendments with a view to the Government producing similar amendments, which we will table on Report. I hope that I have reassured noble Lords.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lords, Lord Taylor and Lord Best, and my noble friend Lord Harris for their support for these amendments. I am particularly grateful to the Minister for the commitment that even though she is not able to accept the amendments in the terms in which they appear on the Marshalled List, there will be consideration and some government amendments moved on Report. Between now and the time when those amendments are to be tabled, we would welcome an opportunity for discussion about the content, and I am sure that the noble Lord, Lord Taylor, would like to be involved in that as well.
Lord Taylor of Goss Moor
Obviously I will not seek to press these amendments but I very much welcome what the Minister said. I would have liked to have spoken at great length about how much I welcome what is clearly a cross-party consensus on moving forward on this basis. It has the potential to provide a huge and new opportunity for local communities to deliver fantastic places, not just fantastic homes that people can afford.
Lord McKenzie of Luton (Lab)
My Lords, like the noble Lord, Lord Greaves, we have concerns with the amendment. The Countryside and Rights of Way Act 2000 was one of the most successful and supported pieces of legislation in this area of policy—although not always in your Lordships’ House. It strengthened and consolidated the aims of Labour’s original National Parks and Access to the Countryside Act 1949. Since then, the most recent Labour Government introduced the Marine and Coastal Access Act 2009, extending the right further.
We on these Benches are concerned that the amendment would unpick the agreement of the Natural England stakeholder working group which, as we have heard, brings together users, landowners, local authorities, ramblers and the Country Land and Business Association. I urge the noble Lord, if he wants further proposals to be brought forward, to work with the stakeholder working group to deliver a consensus on them.
I might also ask why the noble Lord feels the measure necessary when, as I understand it, there are already powers that permit landowners to apply to a local authority to make changes to such footpaths. A presumption in favour of a diversion would take power away from local authorities and reduce the ability of communities to have a say. I am not sure that that is in accordance with the Government’s localism agenda, although that is a bit thin these days. Local communities, through their local councils, should be able to shape their local area. We should support the rights of all to access the countryside and maintain existing rights of way, especially as the local countryside offers our citizens benefits in terms of health, exercise and mental well-being.
Baroness Williams of Trafford
I applaud my noble friend Lord Skelmersdale’s efforts to help those who face problems with a public right of way that passes through their farm or garden. He will know through his contact with Ministers in Defra that the Government have considerable sympathy for those people who face these issues and who may feel that the system has let them down. Where these cases occur, people may experience acute problems: my noble friend has cited some examples, and I can think of others. Although the numbers are comparatively few, and we should ensure that any changes we make to legislation are proportionate to the extent of the problem, nevertheless, the Government are determined to help by putting in place a remedy.
Noble Lords may recall the passage of a suite of measures in the Deregulation Act 2015 which aimed to reform the system of recording and diverting public rights of way, to which my noble friend referred. The Government are now in the process of implementing these measures, which will come into effect later this year. We believe that the combined effect of these measures, which received cross-party support in both Houses, will make a significant difference, and that we should not legislate further before seeing how they work out in practice. A package of measures such as that, which is being implemented through agreement among stakeholders, is far more likely to prove successful in practice.
There is clear agreement among the stakeholders on the working group that developed the package of reform that the major difficulty for landowners is in getting local authorities to make a diversion or extinguishment order in the first place. Our plans to implement the right to apply for such orders will overcome this. The right to apply will enable a landowner to make a formal application for the diversion or extinguishment of a public right of way. With that will come the right to appeal to the Secretary of State if the authority rejects the application or fails to act on it. Therefore, local authorities will no longer be able to ignore requests or dismiss them out of hand. They will be obliged either to make an order or to be prepared to justify their reasons for not doing so on appeal to the Secretary of State.
The provisions in the Deregulation Act allow the right to apply to be extended to land-use types other than agriculture, forestry and the keeping of horses— for example, private residential gardens. The right to apply will be supplemented by guidance that will effectively act as a presumption to divert or extinguish public rights of way that pass through the gardens of family homes, working farmyards or commercial premises where privacy, safety or security are a problem.
The noble Lord references guidance and I will come back to that in a moment. A further hurdle is to get an order confirmed. However, according to the Ramblers, which keeps accurate records of these matters, of the 1,257 diversion orders which have reached a conclusion in the past three years, 94% did not attract any objections. Of the 6% that did, less than 1% were not confirmed following submission to the Secretary of State. The guidance will give authorities more scope to confirm orders made in the interests of the landowner in circumstances where a right of way may cause hardship because it goes through the garden of a family home, a working farmyard or other commercial premises.
There is no intention to water down the guidance, which was deposited in the House Library during the passage of the Deregulation Act. Defra officials continue to work with the stakeholder working group and the Intrusive Footpaths Campaign to finalise the drafting. We believe that the combined effect of the right to apply and the guidance will have the desired effect and we should not rush to legislate further before seeing how these measures work in practice. Moreover, under the right-to-apply provisions, the Defra Secretary of State will be the confirming authority for all disputed orders.
I am happy to reaffirm the commitment made by the previous Government that we will review, within two years of implementation of the reforms package, how effective the right-to-apply provisions and the accompanying guidance have proved to be. The review will send a message to authorities that the Government are determined that the new policy should work and that if guidance does not bring about sufficient changes, we will consider the introduction of further measures.
The amendment, which was also spoken to by my noble friend Lady Byford, is also concerned with public rights of way. However, she refers to urban routes in current use which are not recorded on the legal record of public rights of way, the definitive map and statement. The amendment would reduce the work of local authorities by removing a whole class of routes from the work to update the record.
I referred earlier to the package of measures in the Deregulation Act 2015 concerned with improving the processes for diverting, extinguishing and recording public rights of way. I also mentioned that the Government are working closely with the stakeholder working group which developed the original package of measures.
The secondary legislation will include regulations made under Section 54(1) of the Countryside and Rights of Way Act 2000—mentioned by the noble Lord, Lord McKenzie—which allows the Secretary of State to specify descriptions of unrecorded routes which will not be extinguished in 2026. The working group and the Government are mindful of the need to consider urban as well as rural. We think that no further primary provisions are required to achieve the outcome sought by my noble friend. With these assurances, I hope that my noble friend will be persuaded to withdraw the amendment.
Trade Union Bill
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Lord Dykes
My Lords, I add my thanks to the noble Lord, Lord Kerslake, for moving this amendment, and to the noble Baroness, Lady Watkins, for what she has just said. Once again this indicates that on the unaffiliated or Cross Benches there has been a considerable collective contribution of good suggestions to restore a sense of balance and proportion into what was far too ideological a matter in the original drafts of the documents that eventually became the Trade Union Bill launched by the Conservative Party in government.
I am advised by the research I sought to do that these matters are very important from the point of view of ordinary, routine, daily trade union activity with employers in the context of the public sector and private company entities in which they work. The main activities in the practical usage of facility time include: negotiating improved pay and conditions for members and the wider workforce and accessing specialist union training on employment rights; accompanying individuals in their disciplinary or grievance hearings; carrying out health and safety duties; training people who are not yet trained on health and safety matters; and promoting learning opportunities and opportunities for further intellectual activity in the entities in which they work.
Those are routine matters, not matters that, I am sure, in the original draft text in Conservative Central Office, before it became the Bill launched by this Government—on the basis of only 24% of the population—were ideological clauses based on the belief that there was some kind of union racket in this facility time element. That simply is not the case on all the evidence we have. Once again I hope that the Government will be tempted to see reason on this and accept the amendment.
Lord McKenzie of Luton (Lab)
My Lords, I support Amendment 20 and the arguments advanced by the noble Lord, Lord Kerslake. I will concentrate my brief remarks on the provisions in the Bill that relate to safety reps, and in doing so I declare my interests as president of RoSPA and a vice-president of the LGA. Concentrating on health and safety reps is not in any way meant to undermine the broader thrust of the amendment as it applies more generally.
As a preamble, I reiterate points raised in Committee about the importance of TU safety reps and the positive impact that they have on the safety culture of their employers. There is an abundance of evidence about the importance of effective health and safety systems and that these systems work best when trade unions and employers work together. That is why the Health and Safety at Work etc. Act gave legal backing to union safety reps and why, rather than seeking to undermine or weaken the system, the Government should be concerned with its promotion and enhancement.
I would argue that the Government are in error in including health and safety reps’ time as facility time. Facility time is time off from an individual’s job granted by the employer to enable a representative to carry out their trade union role. We have heard why this should not be constrained in the manner proposed in the Bill. A safety rep, however, although appointed by a trade union, does not fulfil a trade union role as such. It is a specific legal position with defined functions, and the regulations state that in this capacity it must represent all workers in a workplace, not just union members.
This comes about not only from the Health and Safety at Work etc. Act but by Article 11 of the 1989 EU framework directive which deals with consultation and participation of workers. The directive specifically states:
“Employers must allow workers’ representatives with specific responsibility for the safety and health of workers adequate time off work, without loss of pay, and provide them with the necessary means to enable such representatives to exercise their rights and functions deriving from this Directive”.
There is no limit on this, but it would have to be reasonable. The UK regulations use the phrase “as shall be necessary”, which will obviously vary from workplace to workplace and from time to time. The exercise of reserve powers under Clause 13, which are triggered by consideration of the information requirements of Clause 12, would be entirely inconsistent with the directive, which focuses on the need for adequate time off to exercise rights and functions. The latter must have regard to the circumstances of individual workplaces, which, as I say, can vary from location to location and from time to time.
Moreover, the legal requirement under the directive is for the employer to comply in allowing time off. This is as it should be, because it is generally the employer who creates the risks which have to be managed. It is not for the Government to second-guess in respect of either public sector workplaces in aggregate or individual workplaces in particular. Can the Government spell out for us the circumstances in which they envisage using these reserve powers to limit the time of safety representatives otherwise agreed between an employer and a trade union? What evidence do they have that there is an abuse of the system as the law stands? The Minister in the other place, Nick Boles, is on record as acknowledging that:
“An employer must allow them”—
safety reps—
“as much paid time off work as is necessary or reasonable to perform their statutory functions, and we absolutely do not propose to change that rule”.—[Official Report, Commons, Trade Union Bill Committee, 22/10/ 15; col. 352.]
In that case, why they are potentially subject to reserve powers in Clause 13 and why will the Government not remove those powers?
There is one other point. The Bill applies only to trade union representatives. The Minister will be aware that there are two sets of regulations covering workplace representatives: the 1977 regulations, which apply only to trade union reps, and the 1996 regulations, which apply to representatives for workplace safety in non-unionised workplaces. If the Bill is passed in its current form, the Government will be able to restrict time off given to trade union representatives in the public sector but not to non-trade union ones. Is this the intention and why do the Government seek to discriminate against trade union reps in this manner? Can the Minister tell us how this measure is consistent with the fairness obligation that was set out at the start of our proceedings?
Lord Bridges of Headley
My Lords, I am grateful for the contributions this evening. I will try to keep my remarks relatively brief but hope to explain why I believe this measure is both proportionate and reasonable. First, as has been said, the reserve power may never need to be used. Our intention is that the transparency measures that I have outlined before, as noble Lords know full well, should encourage employers to moderate their spending where necessary. To pick up on the point that the noble Baroness, Lady Watkins, made, managers will, for the first time, be able to easily compare their spending with others in their sector. However, if for some reason inefficient spending is not addressed, it is only right that there is a reserve power to ensure that wasteful use of taxpayer funding does not continue.
Noble Lords should remember that even if this power were to be used, as I have said before, facility time will not be banned, as the Government note the considerable contribution that it makes. That brings me to the process that would have to be followed if these powers were to be exercised. First, as the reserve powers are subject to the affirmative resolution process, this House would have the opportunity to debate and scrutinise any cap that may be proposed. Secondly, crucially, implementation of the reserve powers must be rational and evidence based. Ministers must have regard to the relevant information to make their decision. If Ministers do not do so, they invite upon themselves the prospect of judicial review proceedings. The cap is a power of the last resort, and cannot be applied without due and proper consideration of all relevant factors.
I now turn to what might trigger the cap. The reserve powers are most likely to be triggered in one of two circumstances. First, if unjustifiably high patterns of spend were found to persist in certain parts of a sector, that would signal a need to investigate further why they were happening. If the answer were to be that particular parts of a sector needed to do more to control spending, a decision may be taken to apply a cap to that sector or part of that sector. Secondly, if a significant proportion of the cost of facility time is spent on trade union activities as opposed to duties—a key difference—across a sector, we may question why expenditure for which there is no statutory entitlement is being given such priority. We may conclude that such spending does not reflect reasonable prioritising of public funds and suggest applying a cap at a level we believe is reasonable.
If either of these situations were to arise, the Minister must present the case for using the reserve powers to Parliament to secure affirmative resolution. Before the Minister can do that, as I have said, they will have gathered trend data showing patterns of spend to support a rational, evidence-based case for why a cap should be made at a particular level. If Ministers do not feel they have sufficient data to arrive at a decision, they may also choose to consult the relevant sector. This House would of course have the opportunity to debate that cap.
I note the concerns that this is anti-localism but if a cap were to be imposed, it would still be up to local managers to decide how to manage facility time within the cap: for example, by deciding how they should prioritise trade union duties as opposed to activities. Working within budgets, while still meeting statutory duties, is not a novel concept in the public sector.
Turning specifically to devolution, I would argue again that this matter of industrial relations is entirely within the legislative competence of the United Kingdom Government. If an organisation is publicly funded, it should be held to account for how taxpayers’ money is spent. Taxpayers in Scotland and Wales have the same right to transparency about how much money and resource is dedicated to industrial relations—a reserved matter—as taxpayers in England.
A valid concern was raised about the effect of a very restrictive cap, were one to be placed on facility time spending, and what that might do as regards health and safety obligations. I cannot envisage any circumstances under which this Government would introduce such a restrictive cap that important statutory obligations could not be met. We would certainly take account of what was necessary to ensure such union duties could be properly performed. After all, to do otherwise would leave the Government exposed to challenge by judicial review. For that reason, we do not expect there to be any conflict with employers being able to meet their statutory duties, but we are not going to dictate to them the minutiae of how they may do that. As a final reassurance, if required, the Bill contains the power to make exceptions to the cap to meet statutory obligations.
At the end of the day, by removing the cap entirely, the Government would be able to point to where taxpayers’ money could be saved or better spent, but be unable to do anything about it. Government needs the power to act in a reasonable and accountable way. Under our proposals, this House will have the opportunity to scrutinise any cap, were one to be introduced. Ministers must have regard to relevant information to make their decision; failure to do so risks judicial review. Union duties such as health and safety will remain a statutory obligation. With that in mind, I ask that the noble Lord withdraws his amendment.
Lord McKenzie of Luton
Before the noble Lord sits down, could he just deal with the point about the difference between non-trade union reps being covered under one set of regulations and trade union reps under another? Why is that discrimination being allowed in the Bill?
Lord Bridges of Headley
My Lords, we need to make sure that taxpayers’ money is properly accounted for, wherever it is spent. My understanding is that that is the rationale behind this.
Bank of England and Financial Services Bill [HL]
Lord McKenzie of Luton Excerpts(8 years, 11 months ago)
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Lord McKenzie of Luton
My Lords, I will speak briefly to Amendment 25. I thank the noble Lord, Lord Bridges, for his courtesy in organising a meeting with officials and for his helpful letter of 14 December. Having said that, I am bound to say that it is not helpful to receive the Government’s response to their consultation on the secondary annuity market just this morning, particularly given that the consultation closed on 18 June—six months ago. This is simply not the way to make good legislation and I look to the Minister to undertake that we will have the opportunity to return to this matter at Third Reading, should our further examination of the government response identify issues which raise concerns.
Clause 27, together with Amendment 25, provides a broad framework for aspects of the secondary annuity market, but much is left to regulation: relevant annuities, relevant interests, exempt persons, criteria determining the proportion of a person’s financial resources and appropriate advice. Yet more will be dealt with via FCA rules, although I understand that this will be subject to consultation in 2016. We are clearly not going to be able to see even draft regulations by the time the Bill leaves this House, and although the government consultation response fills in some of the blanks, there is still much that is unknown. My noble friend Lady Drake has pressed the recommendation that at least the regulations concerning exempt persons should require the affirmative procedure, as recommended by the Delegated Powers and Regulatory Reform Committee. Like my noble friend I would press that matter on the Minister and hope that he will respond positively.
If there is to be a secondary market in annuities, we agree that as well as extending Pension Wise to provide free and impartial guidance to those with a relevant interest in an annuity there should be a requirement to seek financial advice before such annuities can be sold. A particular bone of contention is the protection of dependants and beneficiaries, an issue which, as my noble friend said, impacts disproportionately on women. Although this is acknowledged in the government response, they are simply asking the FCA to consider whether a requirement could be placed on the annuity provider to ensure the dependant or beneficiary of an annuity has consented to an assignment and to consider further rules for consumers with vulnerable characteristics. The Government are also passing to the FCA consideration of the challenges arising from their being unnamed beneficiaries. It will be important for there to be clarity on these matters by April 2017. What will happen if there is not?
It appears that the Government are not going to prohibit the assignment of an annuity for those on means-tested benefits, as my noble friend said, or for those meeting social care costs, but will look to changing guidance to help people understand the deprivation of income and capital rules. Perhaps the Minister might say more, given the complexity of these issues, about how robust this consumer protection will be.
It would seem that the secondary market will not be without its complications: there will be individual annuity holders; there may be beneficiaries and dependants; there will be purchasers of rights of an annuity under a specific regulated activity; there will be a further regulated activity for providers buying back annuities; there will be regulated intermediaries; there will be IFAs providing mandatory regulated advice; and there will be authorised entities to check that holders of a relevant annuity have received appropriate financial advice. Given this plethora of parties, how confident is the Minister that conflicts of interest can in practice be avoided? Where are the costs of all of this going to fall? Who, in particular, is going to meet the costs of an authorised entity checking to see that appropriate financial advice has been received? These arrangements also of course mean that the annuity providers will be under no obligation to permit assignment of annuity payments in the first place.
The Government appear, again as my noble friend said, to have changed their mind on allowing providers to buy back their annuities through intermediaries. Can the Minister say more about how the originally perceived consumer detriment of this is to be managed? The Government do not seem to have resolved some of the basic operational issues. What is their current position on maintaining a central death register?
The Government will not restrict any entities from purchasing on the tertiary market, nor do they seem minded to place restrictions on buyers’ abilities to reassign annuities once purchased. However, they are looking at preventing UK retail investors from purchasing rights under annuities that are reassigned on the tertiary market, to protect them from a complex financial product. We would agree with that approach. It seems that the prospect of securitisation or unbundling in the tertiary market leaves scope for the tax planners.
The consultation response states that the Government want the secondary market for annuities to be fair, simple to understand, cost effective and operationally deliverable. It is clearly a long way from that. There are a host of issues still to settle but none more important than the protection of consumers. All of this is in circumstances where the Government expect that, for most annuity holders, continuing to hold the annuity income will be the right decision. I am not sure where this will all end up but we will not, for the time being, oppose this amendment.
Lord Davies of Oldham
My Lords, I am not here to pile Pelion upon Ossa. I counted that at least 12 questions of considerable complexity have been addressed to the Minister, and all of them are important. My two noble friends have of course reflected the considerable anxieties on this side with regard to the position with pensions, particularly for secondary annuities. I hope the Minister will do his level best to respond to real questions that need to be addressed, which would also minimise the amount of time we will need to spend at Third Reading on the issue.
Bank of England and Financial Services Bill [HL]
Lord McKenzie of Luton Excerpts(9 years ago)
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“Pensions guidance: review
The Secretary of State shall, before any regulations under section 333A(2A) of the Financial Services and Markets Act 2000, as inserted by section 24(3) of this Act, come into force—(a) undertake and publish a review of—(i) the progress of provisions enabling a person to access a cash balance or other money purchase benefits, and (ii) the extent to which pension guidance has in practice empowered consumers to make informed and confident choices about their pension arrangements;(b) introduce arrangements for establishing a research programme to track consumer outcome with respect to the pensions guidance;(c) review the adequacy of reporting requirements for pension providers;(d) strengthen safeguards against pension scams through the provision of misleading guidance or advice;(e) clarify the distinction between pensions guidance and pensions advice;(f) identify—(i) the specific risks which consumers may face in the secondary annuity market, and (ii) any improvements, additional safeguards and resourcing which are required for an extended pensions guidance service to help individuals make decisions in connection with transferring or dealing with the right to payments under an annuity.”
Lord McKenzie of Luton (Lab)
My Lords, I should explain that this is a probing amendment at this stage. Indeed, it was prompted by Clause 24, which of course is an enabling provision to allow Pension Wise to be expanded in due course to cover guidance for a secondary annuity market. It also enables us to pursue issues that arise from the House of Commons Work and Pensions Committee report covering guidance and advice. This is not to revisit our support for the changes to the pension regime introduced from April 2015, although we previously expressed our concerns about the speed with which such a dramatic policy shift was introduced and the lack of consultation that would normally characterise such a change. I thank the Minister for his letter of 4 November that followed up on some matters raised at Second Reading and which, to an extent, overlaps with this amendment.
We welcome the announced delay to the introduction of the secondary annuity market until 2017, given the reported responses to the Treasury consultation, in particular because of expressed concerns about the potential costs of operating a scheme and the challenges of enabling an in-depth package of support for consumers making their decision—I will say more on this in a moment. The Bill makes reference to enabling guidance for “relevant interests” for “relevant annuities”. Perhaps the Minister can give us news of what these terms may cover or, at least, when we might expect some news.
The House of Commons Select Committee raised a number of concerns about the current arrangements. A key concern was the lack of data and, indeed, a reticence to publish statistics, which inhibits proper scrutiny of how the reforms are progressing. It recommended that the Government should publish, or cause to be published on a quarterly basis, customer characteristics, including pension pot size and other sources of retirement income; take-up of each channel of guidance and advice; reasons for not taking up guidance and advice; subsequent decisions taken; and reasons given for those decisions. It will also be important to have a breakdown of the customer characteristic by gender and ethnicity so that there is a greater understanding of the differing impact of these changes.
The Minister’s letter suggests that Government will make “core” Pension Wise data available on the government performance platform “this autumn”. Can the Minister expand for us on what is to be covered by “core data” and whether they will satisfy the recommendations of the Select Committee that I have just outlined? The committee rightly concluded that the long-term effects of the new freedoms are uncertain and recommended that the Government initiate a rolling research programme to track the long-term consequences of consumer decisions. It is to be welcomed that research is to be undertaken on the immediate impact of a Pension Wise appointment on customers, but where does this leave the concept of a rolling research programme? Does the Minister agree that one is appropriate?
From what data there are, there seems to be a legitimate cause for concern about the take-up rates of the guaranteed guidance and suggestions that fewer than one in 10 individuals accessing their pension pot availed themselves of face-to-face or telephone advice. Given that the guidance guarantee was recognised as a fundamental component of the reforms and vital to help individuals make informed choices about their lifetime savings, is the Minister satisfied about the current state of play? Particular concern was recorded by Age UK and the Financial Services Consumer Panel about whether the system of pension providers giving risk warnings and signposting consumers to Pension Wise was operating as it should. There are suggestions that providers are following the letter rather than the spirit of their obligation—hence the recommendation that there should be a review of the obligations with a view to their being strengthened, particularly in the prominence given to communications. Will the Government encourage the FCA to strengthen its rules and guidance for pension providers concerning Pension Wise?
The Minister will be aware of the ongoing debate around the adequacy of just one session with Pension Wise and whether it really is sufficient to support people through their retirement. The expectation is that those with complex needs should pay for advice. For others, it seems they could dip in and out of engagement with the specialist services of TPAS, the Money Advice Service and Citizens Advice. Is this viewed by Government as a sustainable model? Confusion abounds, seemingly not just among consumers, about the distinction between advice and guidance, and we are reminded that the FCA January 2015 guidance seeking to clarify the boundaries of advice runs to 47 pages. Evidence suggests that individuals are very reluctant to pay the typical sums required for a session with an independent financial adviser, hence the need and hope for some middle ground between regulated advice and guidance. Progress on this will presumably have to await the outcome of the Financial Advice Market Review.
It is hard to read a newspaper or indeed watch a consumer TV programme these days without some reference to the rise of pension scams. Whether there has been an actual increase is, according to the Select Committee, a matter of some uncertainty, although the ability to access the whole of one’s pension pot has certainly created scope for the increase of such activity, given the ingenuity of unregulated businesses often based overseas.
Lord McKenzie of Luton
My Lords, I thank the Minister for a very comprehensive reply to the issues raised in the debate. I think there may be one or two specifics that he will follow up on in correspondence, and that would be helpful.
I think the Minister said that the response to the consultation on the secondary annuity market would be published next month—I hope I caught that correctly; if it is not next month, perhaps he might write to me and say when that will take place.
I thank my noble friend Lady Drake for her, as ever, wise words on pensions, focusing on the risks and complexity of the secondary market system. She made the telling point that if the problem with the annuity market was the creation of those annuities in the first place and whether people were getting value for money, the situation could be compounded by overlaying a secondary market. That is a key issue to address.
The noble Baroness, Lady Kramer, made the point about the growth of DC schemes and the lapse of DB schemes, and that is right. I think we are now in the position where there are more members of DC schemes than there are of DB schemes. Of course auto-enrolment and the benefits of that will accelerate that as well.
Having said all that, and given the hour—I have been here for only one amendment but am conscious that noble Lords have sat through a very busy day— I beg leave to withdraw the amendment.
Bank of England and Financial Services Bill [HL]
Lord McKenzie of Luton Excerpts(9 years ago)
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Lord McKenzie of Luton (Lab)
Despite the hour, I have enjoyed listening to the deliberations thus far and the many knowledgeable banking contributions. In fact, I signed up to speak on just one clause—Clause 24, concerning pensions guidance. As we have heard, this clause is an enabling provision which expands the scope of the guidance service, Pension Wise, to those considering selling their income from their annuities to a third party. It leads to regulations, what type of annuities might be covered and the interest therein. Doubtless, all this will be aligned with the legislation that ensues from announcements already made, and the Treasury consultation on the creation of a secondary annuity market.
The extension of Pension Wise to cover these situations is, in principle, unobjectionable, but it gives the opportunity to reflect on how the service is working so far and how the implementation of the reforms commencing in April this year are working out. It will be a pointer to whether Pension Wise is actually fit for purpose. The Budget 2014 announced that individuals aged 55 and over would be able to access their DC pensions savings as they wish, subject to their marginal rate of income tax. That was, for good or ill, a profound change to the tax landscape. It was recognised by most that for change to work, individuals would need help to review and explore the options available to them. So the Government determined that individuals should have a guarantee that at the point of retirement they would be offered guidance that was free, impartial and of a consistently good quality and that covered a range of options to help them make decisions, including taking further advice.
These arrangements were, of course, legislated for in the Pension Schemes Act 2015 and were debated at length in your Lordships’ House and the other place. A particular bone of contention was whether there should be a second line of defence in encouraging referrals to the service, which has certainly proved to be necessary. The upshot of all this is a service that consists of a face-to-face component to be provided by CABs, branded Pension Wise, a telephone service to be provided by TPAS and an online service organised by a Treasury team drawn from the Government Digital Service and the Money Advice Service. New duties have been placed on the FCA to have responsibility for the setting of standards and monitoring compliance. It seemed to be the Government’s original intent that the Treasury would retain responsibility for service design and implementation until it was,
“very satisfied that it is working well and is seen to be in a stable and successful state”.—[Official Report, 12/1/15; col. 568.]
Can the Minister therefore tell me how it considers this requirement has been met, given the announcement in September that, because of a strong strategic fit, Pension Wise should move to the DWP by April 2016, and the announcement in October that there is a need to identify a long-term home for the service? What on earth is going on? How does this uncertainty help the service, particularly in its early period, and especially if it is to take on the wider requirements for guidance which the creation of a secondary annuity market will entail?
Of course, we now have the benefit of the report from the House of Commons Work and Pensions Select Committee, hot off the press. The committee had a number of significant concerns about the current situation. One of these was the dearth of information on the use being made of the new pension freedoms, and in particular a near complete lack of data about Pension Wise itself. It pointed to there being no research programme tracking consumer outcomes. The committee noted that the take up of face-to-face and telephone guidance appeared to be lower than many had expected. Expectations when the Pensions Bill Committee was under way were that the take-up rate for guidance would be over 75%, and some 25% initially. The FCA found that, in the three months to June 2015, more than 200,000 individuals accessed their pension pots but fewer than 20,000 completed face-to-face and telephone Pension Wise appointments. This would seem to be consistent with suggestions that the CAB is running at 10% to 15% of its capacity and is redeploying staff to other duties. Would the Minister care to comment on this?
A number of reasons have been advanced for this slow take-up: limited early publicity because of parliamentary purdah, the propensity of individuals to take the path of least resistance and to look to existing established providers, and that the requirement on pension providers to give risk warnings and signpost consumers to Pension Wise is being followed more in the letter than in the spirit.
This is all deeply worrying. Pension Wise was designed to fill a gap in support for consumers, and the Government should see these concerns addressed before loading the service with further obligations arising from the secondary market. Of course, the service currently is predicated on the flow of those reaching retirement; causing the stock of those with existing annuities to be covered raises different issues of capacity. It is estimated there are some 5 million individuals with 6 million annuities.
The Select Committee report makes a number of recommendations, some of which the Government appear to be taking forward, although we would wish to probe these further in Committee. These recommendations include the Government publishing or causing to be published regularly a range of data on such matters as consumer characteristics, take-up of guidance and advice, and the decisions individuals make. Given that the pension freedoms have increased the prospect of people being conned out of their life savings, the recommendations urge a redoubling of publicity around pension scams, advise that the FCA strengthen its rules on guidance for pension providers regarding Pension Wise signposting and risk warnings, and state that there should be a research programme to track consumer outcomes.
It is acknowledged that the Government have launched a nationwide marketing campaign to raise awareness of the guidance service, and that two related consultations are under way. A consultation on public finance guidance has just been launched, and a financial advice market review consultation commenced in August. I presume we are unlikely to see these reports by the time the Bill leaves your Lordships’ House; nevertheless, we will use this legislative opportunity to take stock of how the pensions relaxations are progressing and to consider the protections that need to be in place for the secondary annuity market, which is a very significant development.
Deregulation Bill
Lord McKenzie of Luton Excerpts(9 years, 8 months ago)
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“(b) must be framed so as to include all those whose work activities may pose any risk to the health and safety of any person other than the self-employed persons conducting them.”
Lord McKenzie of Luton (Lab)
My Lords, I will speak also to Amendment 3. I thank the Minister for reverting on this matter at Third Reading, as he promised to do, and for providing some important draft regulations. The issue with which we have grappled throughout this Bill is how Professor Löfstedt’s recommendations might be safely implemented—if indeed they can be—and in particular how it would be possible to deliver the recommendations that those self-employed who pose no potential risk of harm to others should be exempt from the general duties of the Health and Safety at Work etc. Act 1974 without creating unintended consequences.
As we have asserted before, maintaining the status quo for the self-employed is the preferred approach given the minimal requirements that would fall on them in these circumstances and the risk of confusion that could follow any change. However, we accept that this is not where the Government are—hence another attempt to implement the recommendation is necessary. Certainly, the first two attempts to implement a Löfstedt approach fell short. The most recent did not have the support of the professor himself and received substantial criticism when consulted on, not least from the CBI and the EEF, and it is understood that the HSE advised that the last approach should be abandoned. The latest attempt is reflected in the government amendment and in the draft regulations, which I think were circulated on Monday.
As we have heard, this amendment provides a framework for determining who is conducting and undertaking a very prescribed description and, hence, is subject to the general duty. As we have heard, it can be determined or framed by reference to types and locations of activities or any other feature, and, crucially, by whether persons who may be affected by the conduct of the undertaking may be exposed to risk to their health and safety—a very important change.
Although our preference for any exemption from the general duty is that it should be based on everyone being in, subject to exclusions which take people out, rather than the reverse, we see merit in this government amendment. We are comforted by proposed new subsection (2A)(b), which appears to be a substantial change in the Government’s position, as I think the Minister confirmed. It brings matters back to a Löfstedt formulation and therefore we are grateful to the Minister for his efforts in bringing this about, doubtless with the steadying hand of the HSE. It raises questions of how it is to be put into practice and doubtless takes us back to issues around risk assessments, but I was pleased to hear what the Minister said about specific guidance being developed in this regard, as well as use of the existing guidance.
Although comforted, I am bound to say that we are not comforted enough. Our Amendment 2 would simply ensure that, rather than just setting out some of the potential criteria by which undertakings of a prescribed description may be determined—that is, the circumstances which bring a self-employed person under the duties of the 1974 Act—it is mandatory. So regulations determining the self-employed who retain a general duty must always include those who may pose a risk to the health and safety of another person. Indeed, why on earth should that not be the case?
Certainly that approach is what has been provided for in the draft regulations that we have seen. But they are, frankly, only that—draft—and presumably there is no prospect of them being finalised before the end of this Parliament. The Minister may wish to comment on their intended progress. What assurance do we have that the actual regulations will replicate the circulated draft? I understand exactly what the Minister said—that if he were in a position to determine that, that would be the case; it would be the basis on which the Government took them forward. However, we know where we are in the electoral cycle and, come May, who knows who will be in a position to take this forward and on what basis? Is it not the case that the Government of the day could ignore new subsection (2A)(b) in framing any regulations, undoing the good work that the Minister has achieved and reverting to a prescriptive list which bears all the flaws of the earlier version? Changing primary legislation, which could always be done, would be much more difficult.
Incidentally, in determining who is exposed to harm, the Government have discounted the employees of a self-employed person. Accepting that Section 2 of the Health and Safety at Work etc. Act would in any event impose a duty on the self-employed in respect of their employees, can the Minister tell us why that is so?
Our Amendment 3 was drafted before we had sight of the government amendment and it calls for a review of any proposed regulations to see that they are fit for purpose. This still has relevance, although we see that the draft regulations—the Minister referred to this—provide for a review of any regulations within a five-year period. Such a review would clearly be welcome.
On the face of it, the Government’s position represents a significant and welcome change. However, unless we think about locking it down more tightly in primary legislation, it may yet be wasted. I beg to move.
Lord Wallace of Saltaire
My Lords, I thank the noble Lord for his constructive comments, and I recognise that the timing creates some difficulties. I have consulted on whether draft regulations can be finalised, approved and laid before the general election, but I have to say that with the best will in the world that will not, at this stage, be possible. I cannot give the noble Lord a guarantee on the structure, nature and composition of the next Government—I am not sure that any of us can at present. That, of course, has to remain a matter of good will and of the commitment of those who have been involved from all sides in these consultations.
The duties and the question of the employees of the self-employed are covered by the general duty that the self-employed have to consider the interests of others and the risks involved. That seems to me to be fully covered here. We have moved as far as we can and the draft guidance was intended to provide an indication of where this coalition Government would be moving and where we would trust any successor Government to continue in assessing this very delicate balance between where Professor Löfstedt started, which was with the sense that we should try,
“to exempt from health and safety law those self employed people whose work activities pose no potential risk of harm to others”,
and, as he also said in his original review, to,
“help reduce the perception that health and safety law is inappropriately applied”.
That is what we on both sides are attempting to do. I felt that the Government had now moved sufficiently far to assure the Opposition that we were very much pursuing this role and that our proposals would bring Britain into line with other European countries and remove health and safety burdens from the self-employed in low-risk occupations. I hope that that does provide sufficient assurance, but I will see how far we have been able to do so.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for his response, and I entirely accept his assurance about what he sees as the way forward in circumstances where he and his colleagues were in a position to determine that. It is a great pity that the Government have come a significant way on this but we are just a smidgeon away from locking it down and making it mandatory. I really do not see the problem with doing that. If the Government are happy to provide for that in the draft regulations and happy to take those factors into account as part of their amendment, simply always making it mandatory to feature that provision in regulations seems to me to be quite a small additional step and one that could make a real difference. It is a pity that having come so far the Government cannot just close that gap.
Incidentally, in terms of the employees of self-employed people, I understand that Section 2 of the 1974 Act creates a general duty on all employers, whether they are employees, self-employed, or whatever their status is, so I am not quite sure why they are being excluded here when these arrangements are considered. Perhaps we might reflect on that. This is difficult, because I would like to test the opinion of the House, but I think that the Minister has done his utmost to provide reassurance on the record. That is where we are, and it is probably the best way to leave it today. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, in moving this amendment, I will also speak to our other amendments in this group. In doing so, I, too, draw attention to my interest in the register. We consider that this is an integrated group of amendments that stand together, should we decide to test the view of the House. I trust that that is agreed.
The issue of short-term lets has generated considerable controversy since it has been proposed that there should be some relaxation of the London provisions, but it has also focused attention on what is now happening in the market and why the status quo cannot be sustained. Currently, the letting of residential accommodation for temporary sleeping accommodation in London for a period of less than 90 consecutive nights constitutes a change of use for which planning permission is required. Notwithstanding that there is the possibility of a fine of up to £20,000 for failure to secure permission, we know that short-term letting is extensively carried on without permission being available.
We have covered in earlier debates the problems that can arise and the issue is helpfully dealt with also by the briefing we have received from London Councils for this debate. It concerns the potential loss of residential accommodation to the lucrative short-let market, increased problems with noise and anti-social behaviour, loss of community identity, increased crime and fire safety risks, and significant challenges on continual enforcement. We know that other cities around the world are experiencing similar problems. There is clearly a market for this activity and business opportunities have been created, particularly via the internet, which are different, as the noble Lord said, from those of the 1970s. According to the Government’s own figures, there are currently thousands of London properties and rooms advertised as used for short-term lets, each potentially in breach of the law. That is an untenable situation.
The amendments that I am speaking to have the support of the noble Baronesses, Lady Hanham and Lady Gardner of Parks, and the noble Lord, Lord Tope, who have each added their names. Indeed, we have worked together across our party divides to come up with a package of measures that, building on the government amendments, would enable home owners who wish to let their homes on a short-term basis to do so unless there is detriment to the amenity of the locality and to do so within a system where there is proper notification to local authorities and where enforcement is enabled. Like the Government, we do not see this as providing new opportunities for large-scale commercial lettings. These amendments, too, are about providing safeguards for the local community.
Our amendments cover five issues. First, there must be provision in regulations for those letting properties on a short-term basis to have an obligation to notify the local authority. Our amendment is not prescriptive as to form and content and it need not be overly bureaucratic. The Minister rather set his face against that in introducing his contribution, but there is no reason why this could not be dealt with very straightforwardly via some web- based approach. It is not prescriptive, but it would give an opportunity for the local authority to gain an understanding of the scale of activity in its area. It would also aid local authorities in their enforcement role, which we know is a challenge at the moment, and of course could potentially be an encouragement to tax compliance.
Secondly, we consider the number of days in the calendar year that accommodation should be available for short-term letting should be 60 rather than 90, as the Minister recognised, with regulations enabling this to be reduced. We consider that to be a more reasonable constraint and protection on local amenity. But even that would allow a four-month back-to-back letting across a year end. The Minister simply asserted that 90 days was more appropriate. I am not sure that that assertion, frankly, carries more weight than one for 60 days.
The concept is that short-term letting should be allowed effectively for someone’s home. It appears that the Government are seeking to define that by liability to council tax. We think that that is inadequate. Would not a liability to council tax arise for somebody letting residential property on a commercial basis, for example, between tenancies? Limiting the relaxation to someone’s principal residence in London would better target the deregulations.
Fourthly, we welcome the provision that the Government are seeking to make for local authorities to disapply the regulation for certain properties or areas, but oppose this right being subject to the consent of the Secretary of State. Local authorities are better placed to make the judgment about the impact of short-term lettings in their boroughs. Surely, that must be the case. We agree that they should not be able to do this in an arbitrary manner and protection of the amenity of a locality is a fair yardstick. However, we believe that a desirable hurdle rather than one that is necessary is considerably fairer. Indeed, the necessary hurdle could give rise to substantial and fair challenges on the local authority.
Finally, there is the issue of enforcement. In their policy document of February this year, the Government stated that:
“To protect amenity and address concerns over nuisance, the Government proposes that the new flexibility should be able to be withdrawn from particular properties after just one successful enforcement action against a statutory nuisance”.
In his contribution, the Minister said that there was provision elsewhere for this to be effective, but I am not sure where it is. The Government were clear in their policy document that that was what they wanted to happen. Our amendment provides that regulation should make such provision but is potentially more flexible than the “one strike and you’re out” approach.
These amendments are designed not to undermine the Government’s position, but to strengthen the safe- guards, and also, in the spirit of localism, to recognise that local authorities and not the Secretary of State are best placed to determine whether the scale of short-term letting is destroying the amenity of their areas. I beg to move.
Baroness Hanham (Con)
My Lords, my name is also on this amendment, and I would like to draw attention to the declarations I have made in the past of being a joint president of London Councils and also a former leader and member of the Royal Borough of Kensington and Chelsea, which will be affected by this legislation.
The noble Lord has set out very clearly the amendments that we think are necessary to make this legislation tenable. London has a particular problem. I drew attention on Report to a phrase in the policy document which said that London needed to be brought into the 21st century over the renting and letting of property. I said then and I say now that I think that London is already and has been in the 21st century for a very long time. There is enormous pressure on property in London. There is probably more renting now in London than anywhere else. There is a hugely transitory population, so that we now have great areas where we know that people are not resident. The properties are not used; they are investment properties. London has a dichotomy. It is an area where people want to live but now cannot, largely because it is getting so expensive. Where there is investment, the people who have invested in property are not from this country but from abroad. Where there is a lot of very new property on land which perhaps could have been used for local people, it is now largely empty.
The temptation to let is enormous. To make sure that there is no abuse of the proposals which the noble Lord has brought forward, we have tabled these amendments. Before saying more about that, I want to mention some other things that I am concerned about. The Government—of whom I have been a great supporter —are all in favour of devolution, of passing powers to different parts of the country and to different parts of England. We have just done it with Greater Manchester. There is more devolution. London has had devolution through its ability to put forward Private Members’ Bills to deal with the issues that affect London. These Private Members’ Bills are not put forward in isolation: they have to be put forward with the agreement of all the London boroughs. That process has been deficient, at the very least, in terms of what has happened here. I saw a representative of London Councils here today in Parliament and, as far as I am aware, London Councils has been solidly against this proposal since it was first brought forward. By definition, that includes the London boroughs.
For some reason, the Government have chosen to try to override what London wants. They may not think that London figures very greatly within this category in relation to the rest of the country. One of the rationales for making the change is to enable London to do what other parts of the country do. But London is different. It has very different pressures, as I have tried to suggest.
In these amendments we are trying, first, to query whether people really do go on holiday for 90 days. I think we would all be jolly lucky if we managed to get that amount of time off. That suggests that if people want to let for 90 days they might not be quite as altruistic as they might appear to be at first sight. Is it not reasonable to suggest that people might like to go on holiday for a lesser number of days?
Secondly, the amendments are trying to ensure that somebody will at least know that the letting is likely to take place. We have not specified what that process should be other than that people should notify their local authority that they want and are likely to let their properties on a holiday-let basis. If that does not happen and something goes wrong or difficulties occur in those properties—I think that my noble friend Lady Gardner will go into this in more detail—no one will know why or how the properties have been let, or to whom they have been let, and the local authority will have no real powers of intervention. I think that that matters. I am all for deregulation but I also think that because of the whole problem of renting in London, a little more grip needs to be kept on this.
Lord Ahmad of Wimbledon
When the noble Lord referred to the 15 and the seven, I thought, “I hope I have got my maths right”, so I am glad that we said that there were eight and seven. He is quite correct. I mentioned those authorities which did not want the review to happen and, subsequently, the seven which did not object. To clarify that point, I say that the noble Lord is quite right. I hope that I am being clear. I am being detailed in my response so, while I am not expecting it, I at least hope—and one should never give up on hope—that I shall carry the House in certain elements of what I am saying, and that there will nevertheless be clarity in covering the issues that have been raised.
My noble friend Lord Tope also raised council tax liability as a way of demonstrating residency. We believe that this provision distinguishes between private and business premises because it requires liability for council tax, which means that if a property was used as a residence, a hotel or a hostel, it would be liable for business rates. Combined with the 90-night limit, we believe that this provides an appropriate safeguard against short-term letting on an ongoing basis.
I welcome the interventions of the noble Lord, Lord Rooker, as I do those of all noble Lords. I listened to him attentively. He raised the issue of insurance. It is of course a matter for landlords to enforce, and for tenants to abide by, the terms of the lease and any insurance policies. Our amendments relate to the need to apply for planning permission and do not affect issues under an existing lease or indeed an insurance policy.
I hope that I have addressed most, if not all, of the issues raised in the hour and 10 minutes that we have had on this group of amendments. This is an important area, and I assure the House again that the Government have listened to the concerns expressed during the passage of the Bill. We believe that what is in front of us today, and what we are proposing more generally, is a balanced approach, with the objective of updating a law that would work for the benefit of ordinary Londoners wishing to let their homes in a legal way.
I hope that noble Lords will accept the reassurances that I have given again today: we are proposing amendments to seek to prevent the loss of housing stock by allowing the short-term letting of homes for a maximum of 90 days without the need for planning permission. I stress again that there are safeguards in the Bill to check that the added freedom will apply only to those people who are providing their homes and paying council tax; and we are providing local authorities with the power to apply to the Secretary of State where exceptions may be and where local amenities need to be protected.
I believe that the Government have listened and present a balanced perspective on where we are today. If I may, I end with the words of the song:
“Maybe it’s because I’m a Londoner
That I love London Town”.
I believe that what the Government have proposed does just that.
Lord McKenzie of Luton
My Lords, this has been an extensive debate. I am grateful to all noble Lords who have spoken in support of the amendments: the noble Baronesses, Lady Hanham and Lady Gardner, and the noble Lords, Lord Clement-Jones and Lord Tope. I hope they will forgive me if I do not pick up each of the very strong comments that they made.
To the noble Baroness, Lady Shields, I say simply that no one is saying that there should be no opportunity to boost family income or to use a property when someone is abroad—indeed, it might lead to interesting opportunities for tourism—but this is a question of balance and the protection of the local community as well. Just because something can be accessed digitally does not mean that you should disregard other issues, particularly around enforcement.
The Minister is right that over the months we have perhaps narrowed the gap. He asserts that the Government and he himself continue to listen, and I am sure that he does. However, I hope he will respect when I say that on this occasion they have not listened enough. I wish to test the opinion of the House.
Deregulation Bill
Lord McKenzie of Luton Excerpts(9 years, 9 months ago)
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Baroness Gardner of Parkes (Con)
My Lords, I strongly support the amendment, and I declare an interest in that I have a daughter who has multiple sclerosis and is a board member of the Habinteg Housing Association. It does marvellous work in providing lifetime homes.
The importance of this has been so stressed by so many people tonight that I do not really need to comment on it. I have other amendments to speak on and noble Lords will be tired of listening to me. However, I strongly support everything that the noble Lord, Lord Best, and other speakers have said and hope the Government will see sense on this.
Lord McKenzie of Luton (Lab)
My Lords, we should be grateful to the noble Lord, Lord Best, for moving this amendment, which we wholeheartedly support. If there were any doubt as to whether we were going to support it, praying in aid Nye Bevan just about did it for us. I welcome my noble friend Lady Wilkins back to the House and acknowledge her knowledgeable contribution on an issue on which she has campaigned over a long time. It is good that the noble Lord, Lord Shipley, and the noble Baroness, Lady Gardner, are on the same page as well.
We support the review of housing standards: a lot of good work has come out of it. However, one of the consequences, as we have heard, was that lifetime home standards and wheelchair-accessible standards have become optional extras. That is really the issue before us today. The noble Lord, Lord Best, has probed with a series of questions and I hope that the nature of those questions means that the Minister has ready and satisfactory replies to them all.
I draw the Minister’s attention to a couple of paragraphs of the housing review document. On page 6, paragraph 14, it says:
“Unlike other Building Regulations requirements the optional requirements described in the Approved Documents will not be mandatory. They will only be applicable where a local planning authority has put a plan policy in place specifically triggering the application of the optional requirement or nationally described space standard in particular circumstances. Neighbourhood Planning Bodies (and Neighbourhood Development Orders) will only be able to apply the space standard, and not optional requirements”.
Will the Minister tell us why that is the case? Perhaps more importantly, paragraph 21, which looks at applying optional requirements and nationally described standards, states:
“The first step is for a local planning authority to stipulate that an optional requirement or the nationally described space standard applies in that area. As stated already, this must be set in plan policies, which have been subject to normal Plan Examination processes. It would not be appropriate to apply optional requirements or the space standard through supplementary planning guidance, since this is not subject to a sufficient level of scrutiny”.
Have the Government moved on from that, or is that still applicable?
I have one small observation in relation to financial viability and cost. If the additional cost is £500 to £1,000, that is one or two weeks in a care home invested in a home on lifetime standards now. That obviously obviates that, going forward. I hope the Minister can satisfy us on those requirements, because it would be a great shame, given all the progress that has been made on lifetime home standards—particularly in London—if these developments were to push those backwards.
Lord Ahmad of Wimbledon
I thank all noble Lords, particularly the noble Lord, Lord Best, for raising this issue. As he is aware, we have been in regular correspondence on this issue. Before going any further, however, I would like to join the noble Lord, Lord McKenzie, in welcoming back the noble Baroness, Lady Wilkins, to her rightful place in your Lordships’ House. I, too, welcome her contribution here this evening.
The noble Lord, Lord Best, has rightly set out his concerns about the way in which the proposed building regulations’ optional requirements will operate, particularly in relation to issues of access. Let me say that the Government understand these concerns. I have written to the noble Lord with reassurances about the clause, explaining how the evidence gathering will work. I assure your Lordships that we will be issuing planning guidance shortly, to help authorities assemble evidence to use the new optional requirements. I hope that the letters that I have written to the noble Lord, Lord Best, have provided that level of reassurance, but I think it is important that I summarise some of the key points that have been raised in his questions.
Let me just put the amendment into context. In this particular context, we believe that the amendment is not needed, because Clause 31(4) is merely a general fallback power, a reserve power enabling the Government to use regulations to set out conditions for the way in which optional requirements should be used, but only if necessary. They might be necessary, for example, if the system is being misused in some way, or used without sufficient rigour; or if there are problems applying the new regulations. It could be that the guidance proposed does not have the effect expected or is not followed. The new system is based on an approach no different from how local planning authorities gather evidence to justify planning policies now. For the benefit of noble Lords, I will set out the key points about how it will work.
Optional requirements will allow local authorities to set building standards that are higher than those in the building regulations. They are a new concept in building regulations, and are widely supported following our consultation on this matter. They are an important new tool, which I am sure noble Lords will agree should be used appropriately. For the first time ever, we have put a series of housing standards into the building regulations, such as on lifetime homes and wheelchair housing. Giving these areas the full force of building regulations is a major new step that I hope will be welcomed by all noble Lords.
However, because not every new home needs to be built to such standards, and because it is costly to do so, we will let local authorities decide how to target the standards based on local needs, provided the standards do not make local housing developments unviable. The Government intend to issue planning guidance on matters to be taken into account by local authorities to work out their local needs, such as the proportion of older or disabled people. We consulted on the matters to be covered in that guidance. This will mirror the approach taken with planning guidance which supports the National Planning Policy Framework.
Lord McKenzie of Luton
I hope the noble Baroness will forgive me, but I was a little unclear as to whether she was speaking just to Amendment 47, which has been degrouped, or more generally to the raft of amendments that we will consider. If the noble Baroness is able to clarify that, it would help us to determine how we will proceed.
Baroness Gardner of Parkes
I will be happy to clarify that. There seems to have been a slight muddle in that the last amendment I had on Clause 33 was meant to be degrouped, but instead only one was degrouped. I am therefore turning this into a slightly longer and wider field because I lost the opportunity to do that on the previous amendment, which was my original intention. I hope that your Lordships will understand that.
Everything is supposed to be perfect until you do it, then you find—well, I advise noble Lords to read it for themselves. It is from Monday 2 February, in the Evening Standard. There is another whole page on the other side about the woman behind the “unhotel revolution” and pseudo hotels—so it is quite a wide issue. It is interesting that the fraud teams are being brought in to look into the whole issue. I had a reply from the treasury officer when I asked him what of these lettings would be tax free. The answer was, “Nothing, except the right to sublet a room in your own house to a lodger for a sum of £4,000 and something—less than £5,000”. That would be the only free opportunity. It is very interesting that the Serious Fraud Office attended a meeting that we had in the House of Commons in January, partly on this issue but on property in general. There is such an opportunity for fraud that it will be very interesting to know who declares what, with no one able to check on anything at all as to who is in these places, with risks of terrorism and fraud or whatever else is going on. People tell me that they find it almost unbearable, the smell of drugs being smoked in the flat above them, because it becomes so intense to have 10 people in one room. Again, are there no restrictions on how many people can fit into one bedroom? I find it hard to believe that you can have 10 people—and this is in three different flats.
I could go on and on, but I do not intend to, because it is late and the House has had a very busy time, with more to follow. I hope that the Minister will be a bit more open about things, as I am very dissatisfied that Questions for a Written Answer have simply not been replied to. I beg to move.
Baroness Garden of Frognal (LD)
I apologise to my noble friend but I think that under the rules of the House we are still on Amendment 47 and Amendment 48 has yet to be called. There has obviously been some confusion in that people are speaking to two groups of amendments. I think that Amendment 47 is still being debated.
Lord McKenzie of Luton
My Lords, we have got terribly confused tonight. I thought that we were speaking to the generality of the amendments and that that was the noble Baroness’s position. If that is the case and the noble Lord, Lord Leigh, wishes to make his contribution now, I will happily follow him.
Lord Leigh of Hurley (Con)
I thank the noble Lord. I was planning to speak to Amendment 48, so my comments are directed to that group of amendments rather than to the specifics of Amendment 47. I declare my interests both as an investor in residential property and as president—
Lord Leigh of Hurley
I think I am speaking to Amendment 48. If not, I am sure that noble Lords with much greater experience will stop me. Before so doing, I declare an interest as the owner of residential property and as the president of Westminster North Conservative Association.
Clearly, we need Clause 33 because there is a significant problem out there at the moment. Noise and anti-social behaviour from short lets are in the top three complaints we receive when canvassing in Westminster North, and there is an undoubted problem with nomadic communities which make it very hard to plan resources—for example, schooling, rubbish collection and so on. Residents not knowing who their neighbours are increases security problems and we have ended up with a situation in which Section 25 of the GLC Act 1973 is ignored. There is hardly ever any action or prosecutions on it. We have ended up in the worst of worlds where there is a thriving business that is largely underground and a black market, whether housing benefit-funded tenancies or otherwise, run by organised criminals for the benefit often of other criminals.
Having said all that, I am very much for deregulation. I served on the deregulation task force of the DTI in 1995 and would like to see something done to facilitate Londoners legally to enable their properties to be let out to tourists and others to the extent that they are away. We acknowledge that the market for short lets is strong and that people should be able to do what they want with their properties, and in the process take the opportunity to cut out these criminal middle men and try to legitimate the whole business. We need a pragmatic solution. I agree, as has been said, that one of the biggest concerns is where individual flats within blocks of flats are on short let. There needs to be an arrangement whereby leaseholders can all agree collectively on what they want to do on short lets, so that owners and occupiers are not suddenly blindsided by one or two flats being turned into short lets, where some, not all, are used for purposes for which they were certainly not intended. That has led to problems that have been commented on, particularly in the New York market.
Freeing up the market but protecting residents must be done, possibly by creating some sort of opt-in. Tenancy agreements must clearly list expectations and responsibilities. One of the major problems has been in respect of flats let without any gas safety certificates or fire-retardant furniture. Curiously, where people decide to let out rooms in their flat, as can be done, one can only imagine how that will lead to all sorts of unfortunate incidents.
Although Amendment 48 helpfully suggests that the restriction is 30 days, which is reasonable, I am not sure that the proposal requiring seven days’ notice “before each use” is practical. I just cannot imagine that it would work, and it would rather defeat the object of people wanting an immediate short stay.
I will spare your Lordships’ time in going through each of the amendments but I do not think that they are necessary. I wanted to preface my remarks by explaining that I am as fully aware as anyone of the problems and issues in the London market. When I canvass in Westminster North I see it regularly, but I believe that it is possible within the forthcoming regulations for our concerns to be resolved. I take this opportunity to encourage the Minister to come to the House with those regulations as early as possible so that we can see that they reflect the issues about which we are all so concerned.
Lord McKenzie of Luton
My Lords, I shall speak to Amendments 49A and 49B in this group. In doing so, I draw attention to my declaration in the register of interests as an owner of leasehold property. At this hour, I wish that it was not let out and was available, but there we are. These amendments would put in the Bill the right for individual local planning authorities to exclude from the deregulatory provisions of Clause 33 particular residential premises or residential premises situated in a particular area.
I thank the Minister for making time available in recent weeks for a series of meetings to seek to resolve the range of issues opened up by this clause. We are conscious that a variety of views have been pressed on the Government from Members of your Lordships’ House, operators in the market, London Councils and community groups, including the Covent Garden Community Association. As the noble Lord, Lord Tope, said, we should also thank onefinestay for spending time with us to explain the business that it has built and the steps that it goes through to seek to avoid loss of amenity in the areas in which it operates.
The concerns with the proposed deregulation have been most comprehensively described by London Councils in its current briefing. This might be summarised as the potential loss of residential properties because of movement into the more lucrative short-term let sector, increased problems with noise and anti-social behaviour, loss of community identity, increased crime and fire safety risks, and challenges of continual enforcement—indeed, the effect of “churn”, which was spoken to by the noble Earl, Lord Lytton.
Westminster Council estimates that at least 3,000 properties in its borough are being used for short-term letting accommodation. Apparently, there has been a rise of 37% in just three months in Camden. Even if not experienced across London, we recognise that these are very real problems which afflict some areas under the current arrangements, let alone any further deregulation.
It might be helpful if I restate our position. We see no objection to individuals and families letting their homes for short periods, perhaps when they go on holiday, without the need for planning permission for so long as this activity does not prevent the residential premises from intrinsically remaining their home. This is also provided that the scale of the activity does not adversely change the character or amenity of the local neighbourhood.
We have at last before us a policy paper from the Government. Like the noble Baronesses, Lady Hanham and Lady Gardner of Parkes, we regret that this has come somewhat late in the day. It is their long-awaited response to last year’s consultation. It is a pity that we do not have draft regulations but have to accept reluctantly that this is all we are going to get during this Parliament. The paper captures many of the representations we have received over recent weeks. As the Minister will doubtless explain, the intention is to limit short-term letting to 90 days in a calendar year, have clear enforcement arrangements to protect amenity and address concerns over nuisance, with the flexibility being withdrawn if there is successful enforcement action against statutory nuisance, a provision for local authorities to request the Secretary of State to agree targeted localised exemption where there is a strong community case to do so, and a requirement that the property in question must be liable for council tax. Clearly, the devil is still in the detail, but all in all the Government have moved from their starting position and we should thank them for that.
We can support the flexibility applying only to someone’s home and for a limited period in each year. London Councils is seeking a limit of 30 days a year while the Government are proposing 90. We are inclined to the view that 30 days could be unduly restrictive when taken together with other safeguards, although back-to-back periods of 90 days means that a short-term let could extend for half a year, which in our view is too long. The Minister may want to say more about how it is envisaged that enforcement will operate, but we consider that while it is not for primary legislation, there should be at least an annual notification requirement from the householder to the local authority, I think along the lines suggested by the noble Baroness, Lady Hanham, when the first short-term let commences. This need not be an overly bureaucratic process, but it would help local authorities more readily understand the scale of such activity locally and may also be used to signify a possible income tax liability. London Councils seeks a broader safeguard by requiring notification of how long it is to be presumed that each stay will last. The “one strike and you’re out” approach, which we support, would seem to satisfy the difficulty expressed by London Councils over continually having to undertake enforcement procedures.
Where we part company with the Government, and hence our amendment, is on the right of local authorities to override the new flexibility. We do not consider that this should be subject to the agreement of the Secretary of State. Local authorities are in a better position than the Secretary of State to determine what is happening in their individual boroughs and the impact on the local neighbourhood. The use of the term “strong amenity case” suggests that the bar would be set high by the Secretary of State. That is not to say that local authorities can act in an arbitrary or capricious manner. Public policy should prevent this, and in any event, regulations could include the criteria which local authorities should take into account in applying an exemption.
It seems that we are very much in the era of the Minister declaring his support for localism. It was only yesterday in an exchange at Question Time when the noble Lord said:
“I am disappointed. Certainly, on this side of the House, we believe in localism, and this is about devolving responsibility to local authorities”.—[Official Report, 10/2/15; col. 1103.]
That followed an answer given the previous day when he said:
“As we said we would, we have stressed localism and local empowerment, and we have delivered on that”.—[Official Report, 9/2/15; col. 1019.]
I suggest that this is a chance to deliver further.
There is the beginning of some convergence on the different positions, and it is to be regretted that the manner and timing of the issue means that there is limited time to resolve the remaining differences. That is why we are strongly of the view that the safeguard we need to put in the Bill is the right of individual boroughs to pursue exemptions from whatever deregulation eventually emerges. It makes them the final decision-makers.
Perhaps I may comment briefly on some of the other amendments, in particular to Clause 33. Unlike the noble Lord, Lord Leigh, I would say that if the Government had not opened the box, it might be argued that matters should be left alone, particularly as the timing prevents this Parliament seeing things to a conclusion. There may be a case for now starting from scratch and leaving this to the next Parliament, but there is no certainty of the priority it would get. Having opened up the issue, there are clearly matters to address. The extent of short-term lettings in some areas, the nuisance it causes and the difficulty of enforcement arises now. The regulation of differing levels of enforcement by individual boroughs determined sometimes by capacity issues rather than policy is not a comfortable place to be. The twilight zone in which businesses operate is also unsatisfactory, at least for those operators who want to do the right thing.
In some of the other amendments, there are references to the nature of the residential property, for example with the terms “principal and permanent residence” and “principal London residence”. Our starting position was to think that this should apply only to somebody’s principal private residence. We thought about it a bit more and if you have the protection of a limited number of days, particularly if it is 30, that does not seem to matter too much, so long as it is clearly and demonstrably somebody’s home. How many homes you can have in London is an interesting question, but we are less concerned perhaps about that precise definition of residence. However, it seems to me that we do have a convergence on some issues. It is just a great pity that the delay in dealing with some of these issues means that we cannot reach a satisfactory conclusion during this Parliament.
Lord McKenzie of Luton
My Lords, we have agreed to support Amendments 51A and 51B despite the 17th report of the Delegated Powers and Regulatory Reform Committee. We opposed the original amendments in Committee and sought a rethink from the Government, which has come in the form of a sunset clause which would bring the provisions of these clauses to an end by 31 March next year so their use would be strictly limited.
We remain unconvinced that the negative procedure accompanied by a statutory duty to consult is the appropriate procedure for establishing a UDC, but agree that there is little time left in this Parliament properly to explore and debate this issue. We are also not unsympathetic to the strong points raised by the Delegated Powers Committee. We will not, however, stand in the way of the Government for this limited period, but we wish to see a revised approach for the future. A new generation of new towns and garden cities is essential to tackling our housing crisis, and the Government’s handling of the development of Ebbsfleet has fallen far short of what is needed to address the problem.
After many years of delay the Chancellor finally announced support for 15,000 homes at Ebbsfleet in his 2014 Budget, although that figure was significantly lower than the over 22,000 homes that had been planned for as recently as 2012. Even now, Ministers have failed to make clear how they intend to support development in light of a funding shortfall of well over £1 billion. Moreover, there is no commitment, as we have heard, to ensuring a minimum number of affordable homes.
My colleague the shadow planning Minister, Roberta Blackman-Woods MP, sought to amend the Bill to update the remit of new town development corporations to ensure that they are fit for purpose for creating a new generation of garden cities, but the Government voted that down and have taken a very short-sighted approach to planning garden cities.
The TCPA has argued strongly against taking forward this development by way of a UDC, which risks confusing the real differences in the nature of the challenges of regenerating existing places and that of building new communities. We have made clear that in government we would not go down the UDC route; as recommended by the Lyons review we would support the delivery of a new generation of garden cities delivered by garden city development corporations based on updated new towns legislation. However, having given the Government their way on this issue for this limited time, we hope that they will now make progress in delivering at Ebbsfleet.
(a) by a notice fixed to the vehicle;(b) by a notice handed to the person appearing to be in charge of the vehicle at the time; or(c) where the enforcement officer is prevented from serving the notice by either of the methods in paragraph (a) or (b), by post,in respect of a parking contravention on a road in a civil enforcement area in England”
Lord McKenzie of Luton
My Lords, in moving Amendment 53, I shall speak also to our other amendments in this group, Amendments 54, 55 and 56. I am grateful for the support of the noble Baroness, Lady Hanham, and from the noble Lord, Lord Tope, on these amendments.
Local authorities as we know are precluded from using their civil parking enforcement powers to raise revenue. It is suggested that enforcement by CCTV is particularly unfair because a motorist might be issued with a ticket as a consequence of a camera. The ticket arrives at their home some time after the event when they have no opportunity to examine the location when the alleged contravention took place. However, the Government’s consultation on local authority parking last year acknowledged the benefit of CCTV in enforcing moving traffic congestion where cars use bus lanes, do not exit box junctions, and so forth.
Our amendments go further, particularly in relation to the use of CCTV around schools. This matter was addressed forcefully in Committee by the noble Lord, Lord Tope, who pointed out the nonsense of allowing CCTV enforcement for 10 metres around a school—the zig-zag lines—but not beyond. Amendments 54 and 55 would include in the Bill exemptions from the ban, some of which the Government have already conceded should be provided. This applies to contraventions for stopping at bus stops and bus lanes, school entrance markings and red routes on the grounds of safety and the needs of bus services.
It is understood the wording of our wider use of CCTV within 100 metres of a school entrance may not always be practical, depending on the configuration of the road and other junctions. For so long as the principle is accepted, however, the wording could be tidied up at Third Reading. The arguments for preventing parking on the zig-zag lines at pedestrian crossings are similar to those made in relation to school entrances. Cars parked on the white zig-zags on either side of pedestrian crossings can obscure motorists’ view of those about to cross, especially children, the visually impaired and wheelchair users. This is particularly dangerous at zebra crossings where there are no traffic lights and motorists slow down only on seeing a pedestrian starting to cross.
Amendments 54 and 55 would extend the exemption to clearways. Currently there are junctions and other parts of clearways where parking is prohibited to protect pedestrian cyclists and motorists themselves. It is unclear why the Government have chosen to exempt red routes but not clearways, given that the same safety considerations are our concern.
Amendment 66 will ensure that the provisions of Clause 39 cannot have an effect until the equalities impact assessment and a regulatory impact assessment have been undertaken. If the Government continue to argue that the former is not necessary, perhaps they would make clear why. As for the RIA, it has apparently asserted that the measures have no impact on business. However, the LGA says that it has heard directly from private companies contracted to enforce parking, which assert that it does have an impact. Do the Government refute that assertion? I beg to move.
Baroness Hanham
My Lords, I have added my support to all the amendments in this group. The anomaly between the treatment of zig-zag lines at school gates and those by pedestrian crossings is ridiculous. Both involve strong safety issues, and the Government should be able to see their way to including pedestrian crossings, at the very least. They also need to review the regulations about the amount of land taken up as a result of a school entrance. That aspect does not make sense; the amount is far too little compared with what is there at present. That is a technical matter that needs rearranging. The rest of the amendments all seem good common sense. I want to get rid of CCTV, but we cannot get rid of it completely if that will cause a safety hazard.
Baroness Williams of Trafford (Con)
My Lords, as regards the use of CCTV generally in parking enforcement, it is clear that the operational guidance on parking issued by the previous Government in 2004—that is, that CCTV should be used only where parking warden enforcement is impractical—has been largely ignored. It is now used on an industrial scale. For people such as my noble friend Lady Oppenheim-Barnes to be issued with a penalty charge way after the event is simply unfair. Independent parking adjudicators have also agreed that it is unfair. Such practices also undermine the revitalisation of high streets and shops and cross the line of public acceptability. If parking is too expensive or prohibitive, shoppers will drive to out-of-town supermarkets or simply shop online, leading to ghost-town high streets.
The point was raised about exempting the zig-zag lines on a pedestrian crossing as opposed to those outside a school. High streets, where pedestrian crossings are generally situated, are well patrolled by both police and enforcement officers. In any event, parking on a zig-zag line is not just a breach of parking regulations but incurs three points on your licence. That is why, in terms of differentiating between schools and high streets, the safety issue outside schools led the Government to think that the latter case was a suitable exception.
The first amendment in this group concerns the serving of parking tickets. There may be occasions where it is impossible for a civil enforcement officer to physically stick a ticket on to a vehicle or serve a notice at the scene of the incident. The Government are aware of this and have made provision in draft regulations to ensure that service by post is possible in such circumstances. On that basis, I hope that the noble Lord is content to withdraw that amendment.
Noble Lords are also seeking to increase the number of areas where local authorities can continue to use CCTV to enable the issuing of tickets by post. I have given a couple of examples of where the Government have made exemptions, or indeed where they have not. I think that noble Lords and all interested parties will have their own views on where CCTV should or should not be used. The Government accept that sole reliance on CCTV evidence to enforce on-street parking regulations is suitable in certain circumstances. However, if we accepted every argument for increasing the exemptions, we would be back where we started. We have given careful consideration to the list of exemptions and based our decisions on the views of those who responded to the consultation, one being on the issue of the safety of children outside schools.
The noble Lord also offers a new definition of the term “around schools”. This definition would be neither appropriate nor practical. The 100 metres specified in the amendment, or any specified distance, would be arbitrary. Within that distance, it is likely that roads will bend or side roads will branch off the school road. It is unclear how this will be dealt with. Any definition needs to be practical as well as reflect policy concerns.
Amendment 56 would make these powers subject to impact assessments before they were brought into force, which is both unnecessary and undesirable. The Government are proud of the stance they have taken to reduce the impact of rules and regulations on businesses and policymakers. Government guidance published in 2013 clearly states that impact assessments are required only for measures that regulate or deregulate business or concern the regulation of business. This clause applies only to local authorities that carry out parking enforcement, and no impact assessments are therefore required.
This whole issue is a matter of principle for the Government, not of balancing impacts. Drivers often receive a parking ticket through the post several weeks after the alleged contravention. They are given no opportunity to examine the parking location at the time the incident is alleged to have taken place, thereby making it difficult to challenge the alleged contravention. That is fundamentally unfair, and the Government strongly believe it should be remedied. I urge noble Lords to withdraw or not move their amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister for that reply and thank other noble Lords who have participated in this debate. Given the hour, I shall not prolong the matter, except to say that I am still unclear as to which of proposed paragraphs (a) to (g) in Amendment 54 the Government support and which they do not. I acknowledge that my description regarding the inclusion of CCTV around schools perhaps needs to be refined, but the principle holds.
The impact assessment was not the issue. It was that parking enforcement may be a responsibility of local authorities but in many instances it is contracted to the private sector—hence the list that the noble Lord, Lord Tope, referred to. I thought that the Minister said that the issue of whether there should be an equalities impact assessment was a matter of principle for the Government. I am not sure that I heard her correctly, but it would be a rather strange explanation if she did so. I remain unclear as to why an equalities impact assessment is not to be forthcoming. However, given the hour, perhaps we should read the record and follow up in correspondence. I beg leave to withdraw the amendment.
The Lord Bishop of Worcester
My Lords, I support the amendment, whose importance has been ably and eloquently demonstrated by the noble Lords, Lord Low and Lord Tope. It is quite clear that the present situation is costly and complex, as has been said. I should like very briefly, given the hour, to demonstrate how in Worcester—one of the few cities in the UK that has tried to tackle the problem of pavement parking —there have been difficulties because of the current situation.
As is well known, the history of parking enforcement is complicated. Parking on pavements was made a criminal offence under the Worcester City Council Act 1985, but under the Road Traffic Act 1991 it was decriminalised, so that could no longer apply. Despite that, Worcester City Council has continued to try to tackle the problem, and in January 2014 civil enforcement officers began enforcing the most serious cases using existing traffic regulation orders. Worcestershire County Council was originally asked for a city-wide traffic regulation order, but this would have required hundreds of street signs wherever parking on pavements took place, and that was considered untenable. That simply demonstrates how difficult the present situation is. The county council suggested that the city council should look at the issue on a street-by-street basis and generate individual traffic regulation orders, but the city council thought that this approach would be untenable as well.
It seems to me that all that demonstrates the need for a national system. It is worth bearing in mind that those who are blind and disabled feel particularly strongly about this. A blind Paralympian who lives in Worcester said recently that walking down the city’s clogged-up streets is like playing Russian roulette.
Lord McKenzie of Luton
My Lords, we must all be aware of the dangers and inconvenience of parking on pavements and the risk that this can pose for pedestrians. These risks can be especially acute for those with a sight impairment or those who have a mobility difficulty and rely on using wheelchairs or buggies. The problems are compounded, too, for those who have responsibility for children and who try to navigate the pavements with prams. The consequence is that all too often pedestrians are forced to navigate busy and dangerous roads instead. For some, of course, pavement parking can restrict their right of way completely. As the noble Lord, Lord Low, said, we need to be mindful that pavements are not generally constructed to carry the weight of heavy vehicles and pavement parking can cause the break-up of the surface, adding further hazards, even when the offending vehicles are not present. This amendment seeks to address those concerns outside London by making it an offence to park wholly or partly on a verge, footway or any other part of an urban road. But this blanket ban can be overridden by resolution of the highway authority or by the Secretary of State.
We acknowledge the weight of opinion and the power of the argument which supports this approach. We share the need to address inconsiderate and dangerous parking and to seek to restore to pedestrians their right to proceed unimpeded. But at the same time, we have to recognise that there are some streets where some pavement parking may be inevitable—to maintain the free flow of traffic, to allow loading and unloading, or to allow for vulnerable passengers to be disembarked. Moreover, the premise of the amendment is that all people who park their car on the pavement are doing the wrong thing and should be made guilty of a civil offence. We do not accept that.
If we are to redress the balance and tackle the problem of inconsiderate pavement parking, how is this best achieved? We need to work through how it can be delivered in practice. We are keen to empower councils to tackle problem parking. If there are any barriers or bureaucracy preventing this we would be keen to look at ways we can change the legislation so that that is not the case. We do not think that the blanket ban is the best way to go. We consider that individual authorities, which know their areas best, are better able to determine the extent and timing of any ban. For some, an initial blanket ban may be the immediate answer, but others may want something more selective which addresses the most urgent problems first. In some cases, there will need to be liaison between authorities so that approaches are co-ordinated. We support the thrust of what the noble Lord is seeking to achieve, but we think there is another approach so, with regret, we are not able to support him today.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have contributed to the debate on the amendment. It demonstrates that there is no perfect system to allow traffic and pedestrians to move around entirely satisfactorily.
I shall start with the points made about London. Pavement parking in London is banned but people still do it. Enforcement of properly targeted local bans outside London would be more effective than a blanket ban that does not reflect local circumstances. On the more general points, local authorities already have the power to introduce footway parking restrictions where they consider it appropriate. They are in the best position to decide on local parking restrictions and need to consider all road users when taking such decisions. A national ban of the type proposed would require local authorities to remove all existing restrictions, then renew their urban areas where footway parking should nevertheless still be permitted, consult the community and erect new signage and markings. There could be a significant burden on local government.
The amendment proposes banning footway parking but would allow authorities to permit it where it is desired by simple resolution. Circumvention of the traffic regulation order—TRO—process would take away important protection for the public. The statutory TRO process requires authorities to undertake consultation and advertise their proposals before councils take final decisions. A noble Lord made the point about the TRO process being expensive and cumbersome. It is not true to say that the process is a barrier. Some local authorities make up to 200 orders a year for a variety of traffic management purposes with an average authority making between 50 and 60 orders per year.
The Department for Transport’s guidance to local authorities makes it clear that during the appraisal of their parking policies an authority should consider whether pavement parking is problematic in any part of that area. If it is, and it is not covered by an existing traffic regulation order, the authority should consider amending the existing order or making a new one. The noble Baroness, Lady Kramer, wrote to all English traffic authorities on 27 June to remind them of their existing wide-ranging powers to prevent people parking on the pavement where it is a problem.
The noble Lord, Lord Low, made a point about damage to pavements. The Government are committed to investing in our local highways, including the footways. We are providing local authorities in England with more than £3 billion over four years from 2011-15 for the roads and footways for which they are responsible. In addition, in June 2014, the Government announced that they were committed to providing just under £6 billion for local highways maintenance over the six-year period from April 2015 to March 2021. This equates to £976 million per year to local authorities for highway maintenance.
In conclusion, the Government have concerns about the burden on local authorities of managing a change of this scale, a point to which the noble Lord, Lord McKenzie, alluded, especially when those authorities have comprehensive powers to ban footway parking. I have undertaken to have a discussion with the noble Lord, Lord Low, before Third Reading but I would at this stage ask him to withdraw his amendment.
Baroness Williams of Trafford
My Lords, I should make it clear right from the outset that the measure in this Bill is about on-street parking, which is the preserve of local authorities. The issue of ANPR is totally separate and the Government are not going to regulate companies in a Bill that seeks to deregulate.
The noble Lord’s amendment seeks to introduce a new clause which would ensure that measures in the Traffic Management Act 2004 do not prevent local authorities from using an approved device in their off-street car parks. The amendment would apply to the entire Traffic Management Act. The Traffic Management Act sets out the framework for local traffic authorities to manage all aspects of their parking policies. To disapply the entire Act in relation to car parks would create an impossible situation where the legislation that prescribes how local authorities should operate is undermined by itself.
I think that the noble Lord may in fact be concerned about the specific measures in Clause 39 and is apprehensive that these will be extended to local authority off-street car parks. I can assure him again that the measures in this Bill apply only to on-street parking. The Government are not seeking to extend these provisions to off-street parking and have no plans to do so. It would be unnecessary to set out in primary legislation policy areas that the law should not apply to.
Permitting local authorities to manage their off-street car parks with camera technology is something that I know some organisations are keen to see happen. However, the Government have not set out their position on this. We have brought forward a range of parking measures designed to help local shops, support drivers and give communities a greater say on parking policies. These proposals have been established for 18 months and have been consulted on. At no point have we indicated any intention to legislate on off-street car parks.
To bring into the Bill at this late stage measures on a different aspect of parking policy would not give sufficient opportunity for people to consider their implications or to offer an opinion. We believe that this is something on which we should consult before any changes are made to the law, and I would urge the noble Lord to withdraw his amendment.