Cities and Local Government Devolution Bill [HL]

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Wednesday 15th July 2015 Lords Chamber

[Lord Brooke of Sutton Mandeville]

I realise that the drafting of the amendment is not the noble Lord’s, but in proposed new subsection (9), to which he referred a moment ago, it might be sensible if the penultimate word in the penultimate line was struck out at this juncture, as, at the moment, it constitutes nonsense.

[Lord McKenzie of Luton]

Are we dealing with Amendment 79B and proposed new subsection (9)?

Cities and Local Government Devolution Bill [HL]

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Monday 13th July 2015 Lords Chamber

[Lord McKenzie of Luton]

My Lords, we are fully committed to openness and transparency in the proceedings of local government, combined authorities and mayoral combined authorities. We would draw the line so that the same rules operated as for local government currently. We would have reservations about taking it back beyond that—certainly taking it into the area of advice.

That raises a question; I do not know whether the Minister can help us with it. When there are discussions and negotiations about devolution deals, are they in the public domain?

[Lord Brooke of Sutton Mandeville (Con)]

My Lords, my first intervention in proceedings on the Bill were when we were discussing the same subject in Committee. There were references then, as there have been today, to the 1972 Act. The particular episode to which I referred in that previous debate was the Private Member’s Bill introduced by Margaret Thatcher in the 1959-64 Parliament, which was her first real appearance on the parliamentary scene. My late noble kinsman sat on the Front Bench throughout the passage of her Bill.

I have taken an interest in the subject going back a great deal further, to that moment in 1809—we were fighting the French at the time—when the Treasury intervened to say that three particular government departments which it had nominated must by 12 noon on any day, on anything which had been in any way controversial or interesting in the morning’s papers, agree the Government’s position, which would then literally, in the language of government, become the line to take thereafter for the rest of the day. When I served as a Treasury Minister, the reason that I had responsibility for the Central Office of Information went back to that fact, because it was the Treasury which had set up the system in the first place.

I want also to say a brief word about the passage of the then Greater London Authority Bill, because it was the first Bill under which the evidence of those advising councillors in local authorities could be made available to the public at large. I am not in any way intending to pour anything hostile into wounds that are long since healed, but the Minister in charge of that Bill made an extremely loyal and long-term defence of the fact that that provision was in the text of the Bill—which it was not. I am afraid that I did go on pestering the Minister in charge of the Bill—no names, no pack-drill—as to where in the text of the Bill, which we were looking at, that information was. Eventually, he broke down and admitted that they were planning to do it and were going to put down an amendment, but had not actually put down the amendment before. It was very loyal of him to have defended and covered for the junior Minister, the Minister who should have put it down.

This has long been an interest and I shall be very interested indeed to hear what my noble friend says in responding to the propositions that have been put in front of her.

Cities and Local Government Devolution Bill [HL]

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Monday 29th June 2015 Lords Chamber

[Lord McKenzie of Luton]

My Lords, we agree with the noble Baroness, Lady Janke, that we should give some thought to this issue, although I hope she will understand if we are unable to support the amendment as it stands. I will spell out some of the technical issues in a moment. But it does provide an opportunity to probe the Government’s intention on the devolution of fiscal resources to local authorities, including combined authorities—that is, where they are going on their journey.

My noble friend Lord Beecham will set out shortly the policy position we reached before the election on the growth of business rate retention. It accords with Amendment 43 in supporting multiyear finance settlements, for the obvious reason of enabling more effective long-term planning. However, we might consider fiscal devolution over three areas. First, we should look at the current funding arrangements: business rates, council tax, revenue support grants and specific grants. Secondly, we should look at how devolution budgets are to be made available—if functions are being transferred, what is happening to the money? Thirdly, we should look at whether any national taxes are to be devolved to local authorities and combined authorities. We seek to understand the Government’s policy on each of these matters.

National taxes are the thrust of Amendment 43, which appears to focus on property taxes, which have an unambiguous attribution to a specific area. This would appear to be perfectly possible for stamp duty land tax, which is levied on the purchase of residential and non-residential land and property, and for the annual tax on enveloped buildings, which applies to UK residential property put in a corporate wrapper. But capital gains tax appears to be more problematic because a tax liability could arise from netting off losses against gains—for example, a loss on a building in Birmingham against a gain on a building in Manchester—and making it more specific would be difficult. Similarly, the use of an annual allowance that is available generally against gains, and the taxation of corporations in relation to capital gains and how that is identified within an overall assessment, could also be problematic.

It would doubtless be possible to introduce rules to govern all of this, but with further significant complications to the tax system. On compliance, these taxes are geared to a national system and it would be necessary to disaggregate such matters. What is the rationale for attributing these taxes to a combined authority: is it the practicality of a ready additional source of revenue being made available, or because the focus of the combined authority’s activity can positively influence the tax outcome? It is presumed, of course, that the proposition is not to change the tax rates.

Nationally, stamp duty land tax raised just short of £10 billion in 2013-14 and capital gains tax just shy of £4 billion. I do not have the figure for corporation tax on capital gains. But these taxes can be volatile. Stamp duty land tax increased that year by 36%. Of course, it is not easy to predict. Is the growth in stamp duty land tax a good thing? The volume of property transactions in an area might be indicative of a thriving local economy—which could attract investment—but in so far as it is attributable to rising prices, it might simply reflect a failure to tackle supply.

We know the total spending power of local authorities in 2014-15 was in the order of £49 billion, including—though we do not have the precise figure—£10 billion-plus in revenue support grant. If the revenue support grant were, effectively, to be at least replaced by directly accruing property taxes and all business rates were to be devolved, what would be the mechanisms for dealing with the differing needs and resources of the local authorities? Presumably, business rates would continue to have tariffs, top-ups, levies and safety nets, which would help, but it is a little unclear whether the proposed full retention of business rates would be at individual authority or combined authority level. Is the noble Baroness suggesting that this could be done by pooling or by another mechanism? I think it could be done by pooling. The amendment refers to “business rate supplements”. Do these not already accrue to the relevant county or unitary district councils? Does the noble Baroness’s amendment contemplate that additional, erstwhile national revenues would substitute for devolved budgets, or eliminate the revenue support grant?

The Independent Commission on Local Government Finance set out the reasons why local government in England and the services it provides are no longer sustainable in the current form. It called for urgent devolution of powers, funding and taxes to groups of local authorities. We know from the Manchester agreement and our debates the main policy areas that central government appear to be willing to negotiate deals on for transferring functions, but we do not know whether they are willing to do anything on fiscal devolution. Is anything being contemplated, particularly with regard to existing national revenue streams such as stamp duty being devolved to local government? To what extent do the Government plan to adopt the recommendation of the noble Lord, Lord Heseltine, in brigading key national budgets and passing these as single parts to combined authorities, to do with as they see fit? In his No Stone Unturned report, the noble Lord argued the need to bring together separate funding streams which support the building blocks of growth into a single funding pot for local areas. He said that the model could be applied across England, but could not be introduced before 2015-16. We are now there. What are the plans? Is the noble Lord’s advice being rejected?

Will the Minister also tell us whether, as part of the devolution agenda, any fundamental change is contemplated to the current business rate and council tax regimes? Will the reset of the business rate retention scheme not happen until 2020? What is the latest position on the revaluation, which had already been deferred by the previous Government?

On fees and charges, it is estimated that local authorities raise some £10 billion a year. Some of these are locally determined and some are not. Is work under way to remove central government’s control over some of these? What scope would there be for a combined authority to seek increased freedom in this regard as part of a devolution deal? Addressing these fiscal issues is a test of how much central government trust local authorities and combined authorities.

[Lord Brooke of Sutton Mandeville]

My Lords, this is a brief intervention. One of the most attractive features underlying this legislation is the restoration of local pride up and down the country in the communities and neighbourhoods involved. I have always regretted from my time as Higher Education Minister that the relationship between universities and their surrounding communities, which had been very strong in the 19th century, gradually declined as the years went on and were not nearly as effective as they had historically been.

In the light of the amendment which has been moved, I wish to make a generic remark rather than a technical one. I can recall the circumstances in which decisions were taken at national level to reduce the amount of money retained by a local authority in terms of the resources raised within it. The local authority’s powers to have that retention were diminished. I recall that those circumstances arose because of the view of local business that it was perfectly possible for the economic situation in which it had to work to be changed overnight by a large switch in the power of an authority. I shall therefore be interested in what sense emerges from the Government, when my noble friend comes to reply, of not going backwards on that consequence of the circumstances which they replaced.

Welfare Benefits Up-rating Bill

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Tuesday 19th March 2013 Lords Chamber

[Lord Brooke of Sutton Mandeville]

My Lords, my noble friend Lord Deben is not in the Chamber, although I had a word with him outside. I am not sure that he was fair in asking the right reverend Prelate the Bishop of Ripon where he would find the money on the previous amendment. However, when we get into the guts of this amendment, it would be reasonable to expect the Official Opposition at that stage to explain where they would find it.

My memory goes back to Grand Committee on a couple of Bills in the final two years of the previous Government. They were held in the Moses Room; one was on housing and the other was on planning. I recall that the second one occurred in the very first week of the then Governor of the Bank of England—who is still the governor—who expressed anxiety that a recession was now becoming a real possibility. I asked why the Government, in their explanation of the text of the respective Bills on housing and planning, thought that future conditions would be like conditions in the past. I was told by both the Minister and knowledgeable government Back-Benchers in Grand Committee that I was not to worry my head about these things. There was no acceptance that the economic ice was beginning to thin and, specifically, I was told that the recession had not yet happened.

It was only later that I recalled a new year message in the 1950s or 1960s in the Observer by its essayist Paul Jennings in his weekly article. He explained that the new year had come in over a weekend and he had therefore had the opportunity to use the weekend to explore in his diary what the publishers thought he needed to know in the coming year, which they had not supplied in the previous one. It transpired that the answer was the thickness of ice. He explained that he was now in a position to tell the Observer’s readers that you required half an inch of ice to sustain a duck and an inch of ice to sustain an infant, going up in a series of categories until you reached 16 inches for a County-class locomotive and 24 inches for a regiment of foot. It was on reaching the statistic for a regiment of foot that Mr Jennings began to wonder how they knew. He imagined a scene in the Crimea when not much else was happening. The same young Mr Hemmings who took part in the film “The Charge of the Light Brigade” was riding up to Lord Raglan with the news that they had just lost another battalion of the Grenadiers.

If I move from that analogy to the departure of the previous Government, I recall that Mr Byrne, the Chief Secretary to the Treasury, left a note for his successor saying that there was no more money. As a message, that seems to me as daunting for a new Chief Secretary as the news to Lord Raglan that he had lost a battalion of the Grenadiers during what must have been the Crimean War. It is therefore reasonable to ask the Official Opposition where they would find the money for their support for this amendment. Indeed, perhaps the Official Opposition might express some regret for their mistakes in government and explain to the Bench of Bishops what went wrong in their economic policies.

In the same context as the intervention by the noble Lord, Lord Griffiths, I shall personally look forward in the hope that we will be able to come back to that subject on a future amendment, in which I would much enjoy joining with him.

[Lord McKenzie of Luton]

My Lords, we have added our names to this amendment moved so comprehensively by the noble Lord, Lord Low. It requires that all the components of ESA—the personal allowance and the additional component for those in the work-related activity group, as well as those in the support group—are taken outside the 1% cap on uprating. As we have heard, the amendment rightly includes provision for children to be made under universal credit, although it remains to be seen how much progress the faltering universal credit will have made by the time the Bill is spent.

As we have argued on previous amendments, it is the vulnerable who are most affected by the Bill. This is particularly so for those on ESA for two specific reasons. They are much less able to increase their income through work and their living costs are generally higher. This is particularly so for those in the support group, who are furthest from the labour market, but also for those in the WRAG. It is worth remembering that there is a rigorous testing process for people who are unable to work due to ill health or disability. We know that the gateway to this benefit is tough. Although the process involving Atos has been improved, there are still many who end up on ESA only after a successful appeal.

Although individuals in the WRAG are closer to the labour market through their conditionality or otherwise, the route to paid work is not easy, as the noble Lord, Lord Low, said. We know that the Work Programme has not covered itself in glory in this regard. As things currently stand, individuals in the WRAG will lose something like £191 a year by 2015 as a result of this Bill. Those in the support group will fare little better in terms of income, being some £138 a year worse off by that date.

Macmillan has specifically drawn our attention to how these measures will affect people with cancer. Its estimate is that in excess of 40,000 cancer patients will be claiming ESA by 2015 with the presumption that they will be placed in the support group. Macmillan particularly stresses the impact of rising energy bills on this group. Like the noble Lord, Lord Low, I remind the Secretary of State that he should fulfil his commitment to make sure that people on ESA are being fully protected.

The noble Lord, Lord Brooke, challenged me to say where we think the money should come from. I thought I made it clear in the first debate that we think the Government should not proceed with the tax cut that is proposed for those earning £150,000 a year. The proposed tax cut from 50% to 45% would be a source of revenue. The Government say that this will not produce very much, but that assumes that people can get away with planning their income to defeat the thrust of that change. If the Government are alert to that, they could garner that revenue and we believe they should.

There is a wider argument about the extent of debt that can be sustained. The point I come back to is that the greater the failure of the Government in their economic policy—the greater the paucity or lack of growth in the economy—the more it will be necessary for the Government to borrow. If the Government can get growth back into the economy, that begins to ease the debt burden. There is another source there.

I also remind the noble Lord that these amendments take ESA out of the fixed uprating—the collar that this Bill puts around them—so a judgment would have to be made for each uprating period. Traditionally and rightly that has been an increase by the rate of inflation of one sort of another. That is what these amendments are doing. They are not technically, of themselves, proposing a different rate, although I made it clear that we support uprating by inflation for the year that we are about to enter.

It is clear from that combination of reasons that this proposal can and should be supported. It is not constrained by the economic position of the Government. It is the Government that have got themselves into a bind because they have failed to generate growth in the economy.

Welfare Reform Bill

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Monday 23rd January 2012 Lords Chamber

[Lord Brooke of Sutton Mandeville]

This will be not a Second Reading speech but a Second Reading remark, I hope said quickly enough to save my noble friend the Whip getting up gently to rebuke me. It would not have been relevant on the previous amendment but it is on this one.

The noble Lord, Lord Best—I almost called him my noble friend—indicated that homelessness was already on the rise. This debate is about homelessness as much as it is about fairness to children, and will be used as a quarry for homelessness policy in the future. Homelessness can still occur under this amendment in the future where the previous amendment sought to prevent it.

I shall make a counterintuitive comment. For 24 years I represented in the other place what was almost certainly the most poverty-stricken Conservative seat in the country by the proportions of standard household criteria. A lot of my homeless constituents were moved from hotel to hotel, frequently outside my constituency, and often from constituency to constituency. I do not recall anyone talking before about this diaspora but there is no policy, no rule and no mutual convention as to who their MP is as they move to different places. If MPs are not agreed about who their MP is, the poor homeless family cannot be expected to know. In the process, beyond the price their children pay educationally and socially by moving, the whole family pays a democratic price in not knowing who represents them. Believe me, as a former inner-city MP, I know that they stand in considerable need of representation. As a London Member, the present Secretary of State can almost certainly recognise this problem but I reward my Whip’s silence by saying that I am in favour of the cap.

[Lord McKenzie of Luton]

My Lords, this is an important amendment that we can wholeheartedly support. I pay tribute to the right reverend Prelate for his leadership and support for this proposition that has come from many quarters, especially the faith communities. Far from being out of touch, we know that it is the faith communities that so often reach the most disadvantaged people and that statutory services, for all the want of trying, simply cannot reach them.

The debate is fundamentally about fairness. I do not propose to repeat or answer all the points that have been raised. That is the Minister’s job but I agree with the noble Lord, Lord Kirkwood, that if this were about undermining universal credit we would not support it. That is not what it is about; it is a completely separate issue. It has become very confused in the debates we have had both before and now.

I shall speak a little about the dependency culture issue. As I said before, I thought that universal credit was the mechanism to encourage people into work, into the labour market, and to make it clear that being in work paid. That was the key government policy. If that is not sufficient and if it is a deficient policy that needs another component, as said by my noble friend Lady Sherlock, perhaps the Minister can explain that. If this is to drive everyone who is caught by the cap into employment, how does the Minister deal with the point that fewer than half the people on the updated analysis of those who will be caught by it are, on the Government’s own assessment, not required to work, not fit for work or have responsibilities for young children that place them outside the properly constructed category of those who should be expected to work and not rely on benefits? Does the Minister say that somehow the broad policy and all the assessments that have been put in place as a result of universal credit have to be torn up and rewritten for this specific category of 75,000 households? If so, perhaps he can tell us precisely why.

Localism Bill

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Monday 17th October 2011 Lords Chamber

[Lord Brooke of Sutton Mandeville]

In that case, I shall give way to the noble Lord, Lord McKenzie, who I think wants to intervene.

[Lord McKenzie of Luton]

I am conscious that the Minister has spoken, but can she deal with one point, which may be just a matter of drafting? The existing Bill refers to,

“furthering the social, economic and environmental well-being of individuals living, or wanting to live, in an area”.

The amendment would change that to,

“it is established for the express purpose of promoting or improving the social, economic and environmental well-being of an area”.

The reference to “individuals” has slipped out. This may be a point of drafting rather than one of substance, and I am trying to see what it is if there is one. Can the Minister give us an assurance on that?

Localism Bill

Debate between Lord McKenzie of Luton and Lord Brooke of Sutton Mandeville

Tuesday 19th July 2011 Lords Chamber

[Lord Brooke of Sutton Mandeville]

My Lords, I shall speak first to Amendment 152ZZA in my own name, which is a probing amendment, before turning to my noble friend Lord Renfrew’s amendments, about which I shall explain my concern.

In order not to repeat the lengthy procedures described in Schedule 10 for the making of neighbourhood development orders, which are set out as new Schedule 4B to the Town and Country Planning Act 1990, Schedule 9 inserts into the Planning and Compulsory Purchase Act 2004 new Section 38C(5), which says that new Schedule 4B shall apply to the making of a neighbourhood development plan, but as modified. Paragraph (d) of that subsection refers to paragraph 8 of Schedule 4B, found on page 321 of the Bill, and states that that paragraph is to have effect as if sub-paragraphs (2)(b) and (c) and (3) to (5) were omitted. These sub-paragraphs refer to the need to have regard to preserving listed buildings and their settings, and preserving and enhancing conservation areas.

I cannot immediately understand why the Government think that in drawing up a neighbourhood plan such matters should be disregarded. My failure to understand, and therefore my query, is possibly prompted by my prior constituency experience, which was unusual. When Pevsner published his original two volumes on the buildings of inner London, the first volume was devoted wholly—apart from some buildings in Holborn—to what later became my former constituency of the City of London and Westminster South, while the second volume was devoted to what was in 1950 the 42 other constituencies in inner London; in other words, there was a major concentration of listed buildings in my former constituency. Such listing considerations weigh very heavily in my former constituency’s localisms. I would be grateful if my noble friend the Minister could explain what is intended. As I said, my amendment is probing.

I turn to the two amendments proposed by my noble friend Lord Renfrew. My noble friend is the chairman of the All-Party Parliamentary Archaeology Group, in which I am simply a modest foot soldier. However, I once read Greats at Oxford, and I have done archaeology in the vicinity of the Roman wall in Corbridge in collaboration with medieval historian Maurice Keen. He and I went north together and explored mosaics of a Roman villa in a farmyard in Corbridge. I am speaking especially to Amendment 149A, but Amendment 148C is similarly connected.

My Back-Bench experience as Member for my former constituency in the years 1977 to 1979, before my party went into government, was very much influenced by concerns felt by the City of London and the Museum of London about the amount of deep-basementing that was going on and was in the process of turning the City of London into the principal continuous archaeological site in Europe, because so much extraordinarily interesting stuff was being uncovered. That work changed quite a lot of our knowledge about the city’s history. A concordat was reached between the archaeological unit at the Museum of London and the developers as a whole as to how this problem should be handled. It was that, provided there was adequate proof, the developer must always make six months available to the archaeologists to find out what they could, and the developer would pay for the entire archaeological work.

Because so much of this work was going on and was working well, there was a possibility that there would be an occasion when there was disagreement between the archaeologists and the developers. Therefore, eight years later in 1987, both sides being anxious to forestall such a problem, they created an appeal committee of three to deal with a logjam, if it were to occur, of which one member would sit on behalf of the developers, one on behalf of the archaeologists and I—because of my having once been at the Harvard Business School, because of the modest experience that I had had as an archaeologist and an ancient historian, and because I was the local MP and acceptable to both sides—would serve as the chairman. As I was also a Minister, that required permission from No. 10, which, to my agreeable surprise, my noble friend Lady Thatcher afforded me. Even more agreeably, despite the apprehensions which had prompted the creation of this committee, it never had to meet because the arrangements continued to work extremely well.

The arrangements in the City worked well because of the critical mass of the archaeology going on and because of its essential importance. However, this will not always apply across the country. The principles adduced by my noble friend’s amendments are not dissimilar to those I have described in the City, but it is very important that they should apply much more widely and by statute. That is why I support them so warmly. I have addressed my remarks to archaeology but they apply just as readily to the wider heritage scene to which my earlier Amendment 148AZZA was addressed. The fact that this goes so much more widely makes my noble friend’s amendments even more important.

[Lord McKenzie of Luton]

My Lords, this has been a short but fascinating debate. The noble Lord, Lord Newton, said that he had left the Chamber for a respite from our deliberations, but the discussion on this amendment has given us all some relief from the turgid stuff with which we were dealing earlier. Clearly each noble Lord who spoke—the noble Lords, Lord Renfrew, Lord Newton and Lord Brooke, and my noble friend Lady Andrews—spoke with great knowledge and authority. In this job you learn something every day—and I certainly learnt something from that exchange.

If it is right that the Bill would remove protections that are in place at the moment, it must be right that amendments are put in place to address that. If the Minister in responding can assure us that that is not the case and spell it out—we need to know the detail—all well and good. Part of the problem comes back to the dear old NPPF. The Minister said earlier that it will be with us soon but her colleague, the noble Lord, Lord Taylor of Holbeach, last week told us that it would be very soon—we seem to be going backwards on this.

My noble friend Lady Andrews made the important point that if there cannot be satisfaction on this, the risk is that a process of scheduling will take place that would involve local authorities in huge expense. It would be a huge capacity issue for them and we should seek to avoid it. We all want to do everything that we can to make sure that heritage assets, particularly those of national importance, are preserved and that the planning system plays its role in doing that. I look forward to the Minister’s response and her justifications of why she believes that that will happen and that we do not need to change the Bill.